A parliamentary panel applauded the actions made by IIFCL and stated that they will enable the state-owned company to fulfil its position as a pioneer lender in the financing of infrastructure projects by keeping problematic loans under control. India Infrastructure Finance Company Limited (IIFCL) is a public financial company that was founded in 2006 and is entirely controlled by the Indian government. According to the COPU (Committee on Public Undertakings) given recently in Parliament, steps made will go a long way in improving and strengthening the functioning of India Infrastructure Finance Company Limited.
According to the report titled “Reviews of Loans to Road Projects relating to IIFCL,” IIFCL has established a specific department for recovery and NPA management and has strengthened this department with personnel who have specialised expertise in recovery and NPA management. An impartial High-Level Advisory Committee, led by a retired Madras High Court judge and two former Executive (full-time) Directors of Public Sector Banks and Financial Institutions, was formed to further develop the capacities.
According to the COPU given recently in Parliament, steps made will go a long way in improving and strengthening the functioning of IIFCL
“Likewise, IIFCL reported that it has taken a number of strategies to monitor the use of funds for further disbursement, including meaningful scrutiny of progress reports, regular inspection of the borrower’s assets, the borrower’s balance sheet, books of accounts including “no-lien” accounts maintained with other banks, and conducting a regular on-site visit of the projects, among other things. Santosh Gangwar, a senior member of the BJP, chaired the panel, which emphasised the importance of the site visits and said that they are an essential part of efficient project monitoring designed to ensure project profitability and guarantee the quality of loan assets.
Consequently, it said, necessary resources ought to have been put in place to maintain both the viability of initiatives and the greater interests of IIFCL. IIFCL should develop a suitable mechanism for routinely monitoring the projects that they finance rather than solely relying on the report of Lead Bank or any other consortium lender. The method will increase the accuracy, plausibility, and caution of the traffic consultants’ work and income estimates.
IIFCL has established a specific department for recovery and NPA management and has strengthened this department
Therefore, the committee desires that the government develop methods for rating traffic consultants and make the information available to the general public. The panel recommended that a mechanism be put in place to stop the concessionaire from giving the EPC contractor any advances other than the mobilisation advance and that such advances should only be repaid promptly and be supported by sufficient encashable security in the lenders’ possession.