RBI introduces new category of NBFCs

The Reserve Bank of India (RBI) on Friday issued a notification introducing a new category of Non-Banking Finance Companies (NBFCs) as “Infrastructure Finance Companies (IFCs)”. The existing categories of NBFCs are Asset Finance Companies (AFCs), Loan Companies (LCs) and Investment Companies (ICs). Further with a view to encouraging larger flow of funds to infrastructure, the exposure of a bank to infrastructure finance companies has been enhanced up to 20 per cent of its capital funds. The IFCs should deploy a minimum of 75 per cent of itstotal assets in infrastructure loans. Net owned funds of Rs. 300 crore or above with a minimum credit rating ‘A’ or equivalent of Crisil, Fitch, CARE, ICRA or equivalent rating by any other accrediting rating agencies could enter infrastructure financing.