With Basel-III norms likely to be made applicable on the domestic banking industry including some of the financial institutions, these were going to withdraw funding to infra-projects to satisfy Basel-III requirements for mitigating their risks, he said.
Mr. Nayar declared that he has already sounded this to the senior functionaries of the Finance Ministry as also the Reserve Bank of India.
He said that the banking institutions and some of the other such leading financial bodies were hesitant to increase their exposure towards infrastructure projects because of variety of reasons and since during the 12th plan period one trillion dollar of investments would be needed to crease infrastructure for over 9% GDP growth, the existing financial arrangements could not cater to the funding requirements of the intended infrastructure industry.
Therefore, the government would have to create many more financial institutions on lines of IIFCL and even accord a lead banker's role on the IIFCL and the like to help such institutions support the infrastructure projects that need huge financial funding, indicated the Chairman & Managing Director, IIFCL.
Answering a query raised by one of the members of the PHD Chamber whether IIFCL would come forward to support the social sector, Mr. Nayar replied in affirmative saying that it has already prepared a public-private-partnership document in consultation with Planning Commission to serve the social sector and the document is being examined by the latter. However, Mr. Nayar was of the view that his company can extend finances for hospitals and education institutions as per mandate conferred upon it by the government.
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