DFI likely to be set up with IIFCL's paid-up capital of Rs 10,000 crore

A new government-owned development finance institution (DFI) is likely to be set up with India Infrastructure Finance Company’s (IIFCL’s) paid-up capital of Rs 10,000 crore and an equivalent amount from budgetary support. It may have a lower minimum capital adequacy ratio of 9 per cent, compared to 12-15 per cent for non-banking financial companies.

The Reserve Bank of India (RBI) Act and the Banking Regulation Act may be amended to set up the DFI for enabling it access to a line of credit, according to the draft Cabinet note, said sources.

With an initial capital infusion of Rs 20,000 crore, the government or other investors may infuse up to Rs 1 trillion in the DFI at a later stage. The government’s part