The Reserve Bank of India having considered it necessary in the public interest and being satisfied that for the purpose of enabling the Bank to regulate the credit system to the advantage of the country, it is necessary to give the directions set out below, hereby, in exercise of the powers conferred by Sections 45-JA, 45-K, 45-L and 45-M of the Reserve Bank of India Act, 1934 (2 of 1934), and of all the powers enabling it in this behalf, hereby gives the directions hereinafter specified.
These Directions shall be known as the Infrastructure Debt Fund Non-Banking Financial Companies (Reserve Bank) Directions, 2011 and shall come into force with immediate effect.
These directions shall apply to every Infrastructure Debt Fund Non-Banking Financial Company (IDF-NBFC).
For the purpose of these Directions, unless the context otherwise requires
(a) Concessionaire means a party which has entered into an agreement called Concession Agreement with a Project Authority, for developing infrastructure.
(b) Infrastructure Debt Fund Non-Banking Financial Company or IDF-NBFC means a non-deposit taking NBFC that has Net Owned Fund of Rs. 300 crores or more and which invests only in Public Private Partnerships (PPP) and post commencement operations date (COD) infrastructure projects which have completed at least one year of satisfactory commercial operation and becomes a party to a Tripartite Agreement.
(c) Project Authority means an authority constituted by a statute for the development of infrastructure in the country.
(d) Tripartite Agreement means an agreement between three parties, namely, the Concessionaire, the Project Authority and IDF-NBFC that also binds all the parties thereto to the terms and conditions of the other Agreements referred to therein.
4. Words and expressions used but not defined herein and defined in Reserve Bank of India Act, 1934 or the directions issued under Chapter III thereof shall, unless the context otherwise requires, have the meaning assigned to them thereunder.
IDF-NBFC shall have at the minimum, a credit rating grade of A of CRISIL or equivalent rating issued by other accredited rating agencies such as FITCH, CARE and ICRA;
The IDF-NBFC shall have at the minimum CRAR of 15 per cent and Tier II Capital of IDF-NBFC shall not exceed Tier I.
IDF-NBFCs shall invest only in PPP and post COD infrastructure projects which have completed at least one year of satisfactory commercial operation and are a party to a Tripartite Agreement with the Concessionaire and the Project Authority for ensuring a compulsory buyout with termination payment.
8. Credit Concentration Norms:
(i) The maximum exposure that an IDF-NBFC can take on individual projects will be at 50 per cent of its total Capital Funds [Tier I plus Tier II as defined in Para 2(xx) and (xxi) for the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007].
(ii) An additional exposure up to 10 per cent could be taken at the discretion of the Board of the IDF-NBFC.
(iii) RBI may, upon receipt of an application from an IDF-NBFC and on being satisfied that the financial position of the IDF-NBFC is satisfactory, permit additional exposure up to 15 per cent (over 60 per cent) subject to such conditions as it may deem fit to impose regarding additional prudential safeguards.
For the purpose of computing capital adequacy of the IDF-NBFC,
(i) Bonds covering PPP and post commercial operations date (COD) projects in existence over a year of commercial operation shall be assigned a risk weight of 50 per cent.
(ii) All other assets shall be risk weighted as per the extant regulations as given in Para 16 of the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007.
All Other Prudential Norms as specified in Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 including income recognition, asset classification and provisioning norms will be applicable for IDF-NBFCs.
1. Reserve Bank of India, Noti. No. DNBS. 233/CGM(US) 2011, dated November 21, 2011, published in the Gazette of India, Part III, Section 4, dated 31-12-2011 to 6-1-2012, p. 6317, No. 53.