Talking about the State Bank of India's contribution towards the alternative investment fund announced by the government on Wednesday to complete the stalled housing projects, chairman Rajnish Kumar said that according to the RBI guidelines, the lender can infuse a maximum of 10 percent of the AIF.
“There are certain goals around investment in an alternate investment fund (AIF) and we are governed by the Reserve Bank of India regulations. In terms of RBI regulations, there is a board-approved investment policy and accordingly we will make our contribution," he said.
Finance Minister Nirmala Sitharaman yesterday said the government has introduced a special window to provide priority debt financing for the completion of stalled housing projects in the affordable and middle-income housing sector. The government will invest Rs 10,000 crore in the Rs 25,000 crore alternative investment fund.
When asked about the timeline, Kumar said, “One has to be very clear that it is SBI Capital Ventures Limited, which is 100 percent owned subsidy of SBI Capital Markets Limited. It is not that the entire Rs 25,000 crore as of now is to be handed over to SBI Capital Ventures Limited. They can make a quick beginning and they are already managing funds, so they should be able to put everything together in a short timeframe.”
The appointment of an investment advisory committee will be by SBI Capital Ventures in consultation with the sponsor, said Kumar, clarifying that SBI will not be part of it. “We will keep an arm’s length and will just be making a contribution with the approval of our board."
When asked if the fund after being set up will start inviting applications from real estate projects, he said, “Since this news is in the media, everybody knows there is a fund available. Moreover, the lenders themselves can refer because there are many projects where the account may be an NPQ or in NCLT. So even as part of resolution framework this fund can step-in but they will have to do due diligence.”
He said internal rate of return (IRR) expectation will be decided by the government.
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