18 banks buy plots in Financial City

IFCI Infrastructure Development (IIDL), a 100 per cent subsidiary of Industrial Finance Corporation of India (IFCI), which entered into a memorandum of understanding (MoU) with the Karnataka Industrial Area Development (KIADB) to develop the IFCI Financial City at Devanahalli four years back, has completed the phase-I demarcation.

Briefing reporters here on Friday, IFCI MD and CEO Malay Mukherjee said: “Our duty was to complete the leveling process, provide power and water. We are the lead anchor developer to take care of the infrastructure facility.”

On occupation, Mukherjee said, “We have done the infrastructure development. Now, it is left to individual organisations like banks and insurance companies to start construction. They will decide what type of infrastructure should come up. It is their call.”

He said 18 banks and one insurance company have bought land to build infrastructure like IT hubs, data centres, back office and training centres.

IFCI Financial City is spread over 50 acres. Out of this, 38 acres has been sold to 17 parties, and IIDL has retained four acres.

IIDL spent Rs 135 crore on phase-1 and realised Rs 152 crore through plot sales.
For phase-II, the state government is developing a Hardware Park also at Devanahalli. IIDL has been allotted a plot measuring 15 acres by KIADB, which is in the process of being handed over.

IIDL will develop the land for constructing residential units for employees of banks/financial institutions and other organisations located in the IFCI Financial City.

DFI status

IFCI has been seeking the status of a development financial institution (DFI) with the government and the RBI. IFCI was set up as a DFI in 1948 and subsequently got converted as an NBFC (non-banking financial company) while two other DFIs –– ICICI and IDBI –– have converted themselves into banks, Mukherjee said.

“As of now there is no DFI in the country. NBFCs and banks are not able to take care of long-term finances of many infrastructure projects. Banks have asset-liability mismatch, while NBFCs do not have the capacity to lend such amounts. So if IFCI is made a DFI it will be able to raise SLR (statutory liquidity ratio) bonds  which will be 25-30-year-long bonds.”

“We are reducing non-core assets and are in the process of selling our 2.5 per cent stake in NSE,” Mukherjee said.