Banks will lend more to infra cos post credit policy: IFCI

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Banks will lend more to infra cos post credit policy: IFCI

In an interview with CNBC-TV18, Atul Kumar Rai, Chief Executive Officer and Managing Director of IFCI, spoke about his outlook on the credit policy.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS IFCI can touch Rs 54.50-55: Bhamre IFCI BSE | NSE 31/05/12 Are Mutual Funds betting on IFCI?

In an interview with CNBC-TV18, Atul Kumar Rai, Chief Executive Officer and Managing Director of IFCI , spoke about his outlook on the credit policy.

Here is a verbatim transcript of an exclusive interview with Atul Kumar Rai on CNBC-TV18. Also watch the accompanying video.

Q: You have had a chance to go through the details of what the RBI had to announce for NBFCs and for infrastructure lending, what are your takeaways?

A: As far as the announcements on NBFCs and infrastructure lending are concerned, as I understand it, they are going to be affecting only on the margins. There are not substantial changes. One major thing which was expected was on the banking license for NBFCs, which was a budget announcement. On that RBI has said that they would be coming out with the discussion paper sometime by the end of June. So it is not something which is going to kind of give rise to flurry affectivity right away. It is going to be discussed and maybe it is only thereafter that RBI would form its mind on how they would wish to go ahead to give shape to this policy announcement in the budget.

On infrastructure lending, there are two-three announcements. One of them is on provisioning which is reduced in case of sub-standard assets and there is an announcement about the bonds of infrastructure NBFCs, which we are not being allowed to be held-to-maturity as against available for sale and other category right now. So what happens there is probably that we will have a little more willingness on the part of banks to be able to lend to these companies, these are the two-three announcements. However, I don't think that there is a quantum difference which the policy is going to make to how NBFCs functions which is okay at this point of time because we don't expect very enthusiastic or very activist kind of approach to NBFCs at this point of time.

Q: The government had invited bids to appoint consultants for the IFCI revamp, can you give us a status check on that because we haven't heard too much along those lines over the last eight weeks?

A: I haven't heard much either. So it makes two of us. It was in October last that I think there were some presentations which were held. I do not know what has happened thereafter. I am sure that maybe there are issues which have come up which maybe including the budget announcement and so I don't know what the status is right now.