Canara, Syndicate, Vijaya in loan deal

Three major Bangalore-based nationalised banks "� Canara Bank, Syndicate Bank and Vijaya Bank "� have signed an memorandum of understanding with India Infrastructure Finance Co Ltd (IIFCL) to jointly fund large infrastructure projects.

IIFCL is the financial special purpose vehicle floated by the central government for long-term funding of infrastructure projects.

Said M B N Rao, CMD, Canara Bank, "This MoU with IIFCL will help channelise adequate funds to the infrastructure sector and facilitate knowledge sharing in the areas of credit appraisal, structuring and monitoring of commercially viable projects."

IIFCL since the past year has sanctioned close to Rs 7,000 crore of which around Rs 40 crore has been disbursed. This SPV has got the approval from the Centre to raise a total of Rs 10,000 crore.

S S Kohli, CMD, IIFCL, said that they are in talks with various global financial institutions such as ADB and Jetro to raise funds at competitive rates.

"Even though we are a government body, we will fund infrastructure projects for charity. Only financially viable projects will get the nod from us," he highlighted.

The areas of co-operation include the creation of a deal flow of infrastructure project for IIFCL, due diligence and risk profiling of projects, syndication of funds, co-financing and a host of other banking services, including cash management, treasury and non-fund based services.

Added Rao, "Infrastructure continues to be an area of strategic focus. Strategic alliance with IIFCL is yet another move by Canara Bank to fructify the ambitious goals set for the infrastructure sector."

He added that Canara Bank has an exposure of nearly Rs 9,000 crore in infrastructure projects which will grow to Rs 12,000 crore by end of this financial year.