LIC : Float First Infra Debt Fund

LIC (Life Insurance Corporation of India) along with Srei Infrastructure Finance will float the country's first IDF (Infrastructure Debt Fund), under a government scheme aimed at boosting investments in sectors like roads, seaports, airports and power.

The IDF scheme was announced in Budget this year (2011). In 2011 June, SEBI came out with norms for these funds to be set up through the mutual funds route. Recently, the Reserve Bank of India (RBI) laid down the guidelines for infra debt funds as NBFCs.

The government was keen to set up the first IDF by January, 2012. LIC is in talks with SEBI to get the approval for a debt fund, which will be a mutual fund

Mr. Hemant Kanoria, CMD, Srei said, “Recently, Srei has got an in-principal approval from market regulator SEBI to set up a mutual fund. The SEBI  has approved the trustees and we are keen to set up the debt fund as early as possible”.

As per norms of the IRDA (Insurance Regulatory and Development Authority), insurers are allowed to invest only in AAA and AA rated debt papers in the infrastructure sector.

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