What changed
RBI added 'Infrastructure Finance Companies' as a new NBFC category alongside Asset Finance, Loan, and Investment Companies. IFCs must meet strict eligibility criteria: 75% assets in infrastructure loans, ₹300 crore+ net owned funds, minimum 'A' credit rating, and CRAR of 15% with Tier I capital of 10%. IFCs can exceed standard concentration of credit norms by up to 10% for single borrowers and 15% for groups, with additional leeway for combined lending and investments.
What it means for you
Banks and NBFCs focused on infrastructure financing now have a dedicated regulatory category with tailored prudential norms. This allows IFCs to lend more to single borrowers/groups than other NBFCs, supporting large infrastructure projects. Existing prudential norms for income recognition, asset classification, and provisioning remain unchanged for all NBFCs.
What you must do
- Review your NBFC's asset composition to check if ≥75% is in infrastructure loans as per RBI definition.
- Assess eligibility: net owned funds ≥₹300 crore, minimum 'A' rating, and CRAR ≥15% with Tier I ≥10%.
- If eligible, approach your Regional Office with original CoR and statutory auditor certificate confirming asset/income pattern as of March 31 of latest financial year.
- Ensure only eligible assets are counted for IFC classification; onus lies with the company.
Who it affects
Non-deposit-taking NBFCs (NBFC-ND-SI) engaged in infrastructure financing, Statutory auditors of NBFCs seeking IFC classification, Regional Offices of RBI handling NBFC registration
What are the key eligibility criteria to become an IFC?
An IFC must be a non-deposit-taking NBFC with at least 75% of total assets in infrastructure loans, net owned funds of ₹300 crore or more, minimum credit rating of 'A' from accredited agencies, and CRAR of 15% with Tier I capital of at least 10%.
How do concentration norms differ for IFCs?
IFCs can exceed standard concentration limits: lending to a single borrower can be up to 10% of owned fund (vs. normal limit), and to a single group up to 15%. For combined lending and investments, the excess is 5% for a single party and 10% for a single group.
What documentation is needed to apply for IFC classification?
You need to submit the original Certificate of Registration (CoR) to your Regional Office along with a certificate from your statutory auditors confirming the asset/income pattern as of March 31 of the latest financial year.