Move to make IFFCL infra finance firm gains steam

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The Union Cabinet is likely to discuss a finance ministry proposal to convert India Infrastructure Finance Company Ltd (IIFCL) into an infrastructure finance company, a kind of NBFC, with a higher authorised capital.

IIFCL currently does not fall under the regulatory oversight of the Reserve Bank of India (RBI) and is controlled by the finance ministry. The position will alter if the proposal fructifies.

Last year, the RBI had created a new category of non-banking finance companies, called infrastructure finance companies. The other categories are asset finance companies, loan companies and investment companies.

A Bill to alter the 2006-founded IIFCL is expected to be discussed at a meeting of the Cabinet likely to be held tomorrow, officials said. If the proposed changes are approved, IIFCL will be converted into a special category infrastructure finance company with a higher paid-up capital of around Rs 5,000 crore. Currently, the state-owned company has an authorised capital of Rs 2,000 crore and paid-up capital of Rs 2,000 crore.

The Cabinet is also expected to discuss a proposal from the department of public enterprises that would empower all profitable central public sector enterprises to decide on overseas acquisition of raw natural assets without seeking approval from the government.

The meeting is expected to also discuss a proposal to enable India join a global organisation of wine and vineyards.