CCEA gives nod for IDFs to take over bank loans | india | Hindustan Times
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CCEA gives nod for IDFs to take over bank loans

india Updated: Sep 24, 2013 23:37 IST
HT Correspondent
HT Correspondent
Hindustan Times
infrastructure sector

In a move that could boost the cash-starved infrastruc­ture sector, the Cabinet Committee on Economic Affairs on Tuesday gave its clearance for infrastructure debt funds (IDFs) to take over existing bank loans. This would help stretch loan tenure and make long-term financing available to infrastructure projects.

"The taking over of existing bank debts by IDFs will release an equivalent volume for fresh lending by banks to infrastructure projects. This will also help in overcoming the ... asset-liability mismatch being faced by banks," a government statement said.

Long-term funds by IDFs could be channelised from insurance and pension funds, besides sovereign wealth funds to further support lending for infrastructure projects.

The statement added that the cost and tariff of infrastructure services are set to reduce as a result of low-cost long-term debt provided by IDFs.