Power Finance Corporation looking to become infra NBFC Daily News & Analysis
NBFCs are of four kinds—IFC, asset finance company (AFC), loan company and investment company. IFCs were added to the NBFC category in February this year. PFC is a loan company.
Singh said PFC would approach the RBI on Wednesday and that he was hopeful of the approval coming through in a month.
“If we become an NBFC-IFC, our exposure limit to both a single company and a single group will go up by 5 percentage points,” Singh said.
PFC’s current exposure limit to a single private company is 20% of its net worth and to a single private group 35%.
For public sector companies, PFC is allowed to follow its own prudential norms by the RBI till March 2012. The exposure limit for state-owned power companies is 100% of PFC’s net worth and can go up by another 50%.
Talking of the need to become an NBFC-IFC, Singh said the funding requirement of the power sector was huge. “In the Eleventh Five-Year Plan, 28% of the capacity addition is from the private sector while in the Twelfth Plan it is 63%,” he said.
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