The Hindu Business Line : BoB, IDFC tie up to finance infrastructure projects

Mr Anil Khandelwal (left), Chairman and Managing Director, Bank of Baroda, and Mr Rajiv Lall, CEO, IDFC Ltd, at the signing of MoU in Mumbai on Thursday. — Shashi Ashiwal

Mumbai , Feb. 16

BANK of Baroda has tied up with the Infrastructure Development Finance Company (IDFC) for providing finance and other related products and services to infrastructure projects. The two institutions signed a memorandum of understanding to this effect on Thursday.

As per the agreement, both parties will work together to ensure faster clearance of loans to this sector. While IDFC will provide the expertise and advisory services, Bank of Baroda will provide financial products such as letters of credit, treasury products, trade finance products, advisory services, financial guarantees and so on.

The minimum size of the projects financed jointly will be Rs 100 crore, with Rs 50 crore each by each institution. BoB and IDFC are jointly working on a privately sponsored power project, which has already been sanctioned.

Dr Anil Khandelwal, Chairman and Managing Director, BoB, said, "Banks do not have as much domain knowledge and expertise for handling big size projects unlike specialised institutions such as IDFC. Following the tie-up with IDFC, we can provide quicker loans. Response time is a competitive advantage today."

As on September 31, 2005, the bank has sanctioned 53 projects worth Rs 6,000 crore.

The limit set by the bank board for the infrastructure segment is Rs 11,500 crore. Infrastructure lending currently forms 12-13 per cent of the bank's total loan book.

Dr Rajiv Lall, Managing Director and CEO, IDFC, said, "The infrastructure space is growing rapidly and BoB's reach will help us both." Corporates can also raise foreign loans through the bank's overseas branches, he said.

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BoB, IDFC tie up to finance infrastructure projects