FinMin,regulators meet to discuss infra debt fund contours

The finance ministry on Monday met with sectoral regulators,including officials from the Reserve Bank of India,Insurance Regulatory and Development Authority and market regulator Sebi as well as representatives from rating agencies to discuss the broad contours of the proposed infrastructure debt fund.

According to officials present at the meeting,the discussions mainly focused on deciding the jurisdiction of such funds and whether they should be allowed to raise funds from abroad. Further,rating agencies were asked to assess the credit worthiness of the proposed funds. However,the meeting was unable to come to a final decision on the structure of the debt funds,which in effect would decide its jurisdiction.

The debts funds are proposed to be structured either as a trust or a company,depending on which they would be regulated either by the RBI or Sebi.

Discussions were also held on changing the rules for external commercial borrowings. The government is also planning to allow such funds to raise debt from foreign pension funds and insurance funds for which ECB norms will have to be amended. The finance ministry is expected to finalise guidelines for infra debt funds by June.