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Srei Group, part of the Kanoria Foundation, has entered into an MoU with New Zealand's CBL Corporation to set up a 50:50 joint venture to offer surety and guarantee products in India.
This first of its kind joint venture will offer performance guarantees and sureties to its customers in India for participating in projects in the infrastructure and allied sectors.
This unique offering will reduce working capital needs of the players and facilitate project completions without delays, and allow them to grow their businesses.
Commenting on the joint venture, Sunil Kanoria, Vice Chairman,Srei Infrastructure Finance Limited, said "We are very proud to partner with CBL Corporation Ltd to offer this unique financial solution (performance guarantee or surety) to Indian businesses".
He highlighted that in developed nations like the US, Canada, Germany, a Bid Bond or Surety or performance guarantee is a part of pre-qualification criteria for bidders, especially for government sponsored infrastructure products.
"In India, the market for such instruments has not yet developed. As of now, only banks provide such instruments in India and there is an urgent requirement to develop such products and offerings here", he added.
Peter Harris, Managing Director, CBL Corporation said that the decision to form the JV has been a joint effort by Srei Group and CBL management over the last 12 months.
Alistar Hutchison, Deputy Chairman, CBL, said that India is a vibrant and growing country full of special people. CBL and Srei Group's joint venture would add to India's growth aspirations by giving India's businesses greater options in the guarantee and bonding sector.
Vikash Khandelwal, CEO of the proposed joint venture, told BusinessLine that talks are on with the regulator (Reserve Bank of India) to see if the joint venture could be registered as a separate category of NBFC such as NBFC-guarantees.
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