IOB, IIFCL sign MoU for infrastructure finance

New Delhi, Dec 8 (UNI) Public sector Indian Overseas Bank (IOB) has signed an MoU with India Infrastructure Finance Company Ltd (IIFCL), a wholly-owned subsidiary of the government to provide long-term funds to the infrastructure sectors.

The MoU was executed by IOB Chairman and Managing Director T S Narayanasami and IIFCL Chief S S Kohli in the presence of Mr Vinod Rai, Secretary (Financial Sector), Ministry of Finance.

''The move towards funding core sector projects signifies a shift by commercial banks to long-term financing from the earlier practice of extending only working capital/short term loans,'' Mr Narayanasami said.

This strategic alliance is one more step taken by the bank for business growth and to increase its presence in infrastructure financing which has now become a more preferred area, he added.

IIFCL CMD said, '' This association with IOB will go a long way in fostering a joint pooling of resources and expertise to finance organisations in the public sector, public-private partnership projects, etc, in the area of infrastructure financing, which has of late become one of the main thrust areas in the Indian economy.'' IOB and IIFCL will work together closely during each stage, beginning with the initial screening of a project, detailed assessment of business and financial plans of the firm/project, disbursements and implementation and monitoring.

IOB will also consider co-financing opportunities in association with IIFCL in proposed debt finance syndicate.

The bank has been financing several infrastructure projects all over the country, while IIFCL has sizeable exposure in sectors including power, ports, airports, urban infrastructure, water and tourism.

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