Infrastructure Debt Fund

The Infrastructure Debt Fund (IDF) is yet another effort by the finance ministry to acquire foreign funds and domestic insurance money into Indian infrastructure projects. The idea is that, Banks and NBFC will set up either mutual funds or another NBFC, which will sell either mutual fund (MF) units to foreign funds or insurance companies and raise money.

This money will be used to buy out infrastructure loans from banks and the loans should have to be for a PPP project. Also, the banks can sell these loans to the IDF’s only after one-year of commencement of the project, i.e., when they become commercially feasible.

Now the question is: Will banks set up such mutual funds or NBFC? Will foreign funds find it attractive to buy the bonds floated by the IDF's?

Check the answers given by Santosh Nair, deputy managing director of State Bank of India; Prabhakar, executive director of Bank of India and Vikram Limaye, executive director of IDFC in a discussion on CNBC-TV18 on:

http://www.moneycontrol.com/news/business/infrastructure-debt-fund-willfund%28a%29-work-_592872.html

-Bharath M