RBI gives infra NBFC status to L&T arm

In what would lead to easy access of fund for L&T Infrastructure Finance Company (L&T Infra), a subsidiary of Larsen & Toubro (L&T), today received the status of “Infrastructure Finance Company” from the Reserve Bank of India (RBI), within the overall classification of non-banking finance company (NBFC).

Recently, RBI had formed a separate category as infra NBFC. According to RBI, NBFCs holding a minimum of 75 per cent of their total assets for financing infrastructure projects can be classified as infrastructure NBFC.

Earlier, NBFCs were classified under three categories — asset finance companies, loan companies and investment companies.

L&T Infra commenced operations in January 2007 as an NBFC, a part of L&T’s Financial Services Group, to finance infrastructure projects. L&T Infra has achieved total approval of Rs 17,133 crore and total disbursements of Rs 7,615 crore across energy, transportation, telecommunication and other infra sectors.

Infrastructure Development Finance Company has already got the Infra NBFC status.

Other major NBFC players in the infrastructure space include — SREI Infrastructure Finance, Power Finance Corporation and Rural Electrification Corporation and they are also eyeing the infra status.

Experts say with a separate categorisation, NBFCs engaged in infra lending can get special dispensation and will have a clear differentiation. Also, it will have a positive impact and liquidity will be readily available to NBFCs doing infrastructure lending.