RBI gives nod to ICICI bank to set up Infrastructure Debt Fund

ICICI Bank has received approval from the Reserve Bank of India (RBI) to set up an Infrastructure Debt Fund (IDF) - the first debt fund to get the government's go ahead.

Officials from the bank were not available for comments. Industry sources said that ICICI Bank will enter into an equity tie-up with an non-banking finance company ( NBFC) for the fund.

The new company will raise long-term money from investors to lend to infrastructure projects. Among others, IIFCL had announced plans to raise infrastructure debt as well as infrastructure equity funds.

In September, RBI allowed banks and mutual funds to set up IDF. In the 2010-11 budget, the finance minister had cleared the way for setting up of IDFs to increase find flow into infrastructure sector.

Source: EconomicTimes