SBI not to sponsor an infra debt fund for now

By | June 19, 2011

A recent press report said that SBI is not considering sponsoring an infrastructure debt fund (IDF) which is a new vehicle to enhance the flow of long-term debt for funding infrastructure development promoted in Budget 2011-2012.

Mr.Pratip Chaudhuri, Chairman said that the Bank is not considering it because already on the infrastructure side, the bank is lending to the leading companies in ports, telecom and power sector and there is no short fall in the lending to infrastructure. Further he also added that the bank will be selective company-wise and not sector-wise.

The report further stated that the total outstanding with reference to the infrastructure stood at Rs.77,000 crore as of June 2011 of which the power sector accounts for Rs. 37,000 crore, roads at Rs.9,000 crore, telecom Rs. 10,000 crore, Port  Rs.3,000 crore and Educational institutions about Rs.4,000 crore.

The report also clarifies that as per the guidelines issued by the Finance Ministry on June 24 with reference to the IDFs stipulated that the Banks and Financial Institutions can be sponsors of IDFs and cannot directly invest in the bonds issued by these funds. Further the Finance ministry allows IDFs to be established either as trusts or as companies.

The bank has recently hiked its interest rate making its loans such as home loan, personal loan, auto loan etc costlier.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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