They
have agreed to jointly buy out up to 40 per cent of infrastructure loan
portfolios of banks, each having 20 per cent exposure.
“IIFCL
will take all the initiatives with the banks regarding the portfolios. We have
earmarked a total of Rs 10,000 crore, each investing Rs 5,000 crore, for the
current financial year,” S K Goel, chairman IIFCL told Business Standard.
Under
the scheme, IIFCL is allowed to take up to 75 per cent of bank loans for an
infrastructure project on to its books, thereby freeing banks’ capital and
enabling them to lend in new projects.
Since
IIFCL has inherent expertise in infrastructure financing, it will carry out all
the due diligence of the projects, Goel added.
A
senior LIC official said there are some issues that need to be addressed.
“The
main issue is the sharing of the liabilities. We are yet to take a call on the
extent of liability which LIC can bear in case an asset becomes non-performing.
We need to understand the risk carefully before entering into a particular
project. Then we also need to understand to what extent we can invest under the
sector investment norms,” the official added.
According
to the Insurance Regulatory and Development Authority (Irda) guidelines, LIC’s
exposure in a single project is capped at 10 per cent of the total investiable
fund. The insurance regulator also mandates life insurers to invest at least 15
per cent of their controlled funds in infrastructure and social sectors.
According
to sources, the idea of roping in LIC to partner IIFCL in the take-out
financing scheme was mooted by the finance ministry in the wake of the lukewarm
response of the take-out financing scheme floated by the infrastructure financier.
So far, IIFCL has been able to disburse only Rs 90 crore of the total
sanctioned amount of Rs 3,000 crore under the take-out financing scheme.
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