A long jump for IIFCL as DFI tag to support financial needs, growth

Its planned incorporation into a larger development finance institution could present challenges for a company with a founding covenant that restricted its scale of operations

Government-owned India Infrastructure Finance Company (IIFCL) may not be the lender of choice for the big infrastructure push being planned for the economy but a subset of a proposed larger development finance institution (DFI) that will have a capital infusion of Rs 10,000 crore. This, at least, seems to be the conclusion from the government’s plan, announced a fortnight ago, to subsume IIFCL within a larger DFI.

Department of Financial Services Secretary Debasish Panda explained that the objective of this manner of incorporation was to give the new DFI a “quick start” since IIFCL has domain expertise and experienced manpower.