Equipment under ‘infrastructure’ list for bank lending to give fillip to infra projects
The Finance Industry Development Council (FIDC) has suggested a few things to provide a thrust to the ailing infrastructure industry. Equipment used in building of roads, ports, airports and other infrastructure should be treated as “infrastructure” for the purpose of lending by banks.
Bringing “equipment” within the scope of the list of “infrastructure” sectors for the purpose of lending by banks will give the necessary boost to the infrastructure development in the country.This will not only ensure timely availability of suitable equipment needed for the construction and operation purposes, it will also allow the infrastructure companies to buy them at affordable prices.
FIDC made this clear in a letter to the Finance Ministry and the Reserve Bank of India.FIDC is a self-regulatory organisation of asset financing non-banking finance companies (NBFC-AFC) in the country.
It has also suggested that the current restriction on the end use of external commercial borrowings raised by NBFC-AFCs (Non-Banking Financial Company- Asset Finance Companies) should be done away with. These NBFC-AFCs are used to lending only by the way of leasing and that too only on imported equipment. Hence importing equipment will not be very difficult for the industries and the infrastructure projects can be fast tracked.
ECBs (External Commercial Borrowing) for financing by any mode and for both domestic and imported equipment should be allowed, FIDC has said.
Source- The Hindu Business Line
Airports, building of roads, Equipment, FIDC, Finance Industry Development Council, Infrastructure, ports, Reserve Bank of India
