Rajiv Lall, Executive Chairman of IDFC informed that the board of the infrastructure finance company decided to go ahead for a banking license.
IDFC is an infrastructure financing non-banking financial company (NBFC). According to analysts, NBFCs stand a brighter chance to get a bank license from the Reserve Bank of India (RBI).
In February, 2013, the central bank released the final guidelines on new banking licences. Further, the firm intends to set up an infrastructure debt fund (IDF) in the third quarter through the asset management company (mutual fund) route.
Meeting priority sector norms and financial inclusion as perceived by the RBI would be a challenge before the IDFC if it gets a license.
The company is expected to disclose information on the size of proposed IDF in the second quarter. Several other companies have launched or are looking to launch IDFs. ILF&S group and ICICI Bank have launched IDFs, while SREI Infrastructure Finance and L&T Infrastructure Finance are said to be launching IDFs in next few months.