REC gets infrastructure finance company status

State-run Rural Electrification Corporation on Monday said the Reserve Bank has granted it the infrastructure finance company status which would allow the firm to lend more to power projects.

The Reserve Bank of India has now categorised the Rural Electrification Corporation Limited as an Infrastructure Finance Company, REC said in a statement.

REC is into financing power generation, transmission and distribution projects in the country.

With IFC status, REC can now take an additional lending exposure of up to 5 per cent of its owned funds in case of a single borrower and up to 10 per cent of its owned funds in case of a group of borrowers.

The total permissible exposure would thus be 40 per cent of owned funds in case of a group of borrowers.

REC also becomes eligible for issuance of infrastructure bonds and for raising funds up to $500 million (Rs 2,500 crore approximately) through external commercial borrowing in a year.

REC is the second company after Power Finance Corp (PFC) to be accorded the status of IFC by the Reserve Bank. PFC was accorded the status in July this year.