Govt to infuse Rs 400 cr into IIFCL

The government likely to make a capital infusion of Rs 400 crore into the India Infrastructure Finance Company (IIFCL) in 2012-13.

During the current fiscal, the government has provided Rs 500 crore to IIFCL. In the next financial year, the company would get fund support of Rs 400 crore keeping in view the business programme and capital requirement, official sources said.

IIFCL provides funds, especially debt of longer term maturity, directly to the eligible projects to supplement other loans from banks and financial institutions.

To facilitate capital infusion, the Union Cabinet approved raising authorised capital of IIFCL to Rs 5,000 crore to enable it to lend more to the infrastructure sector.

Prior to Cabinet approval last year, the authorised capital of the company was Rs 2,000 crore.

Besides, a provision was also made to increase it to Rs 8,000 crore, subject to the approval of the Finance Minister.

Increase in the authorised capital has enable IIFCL to expand its financial assistance (capability) to infrastructure sector and meet the needs of increased Capital for Risk Weighted Assets Ratio (CRAR).

The government also decided to bring IIFCL under the Reserve Bank's regulatory oversight to enhance professional capability and increase capital base.