Rule 2F: Infrastructure Debt Fund Guidelines and Section 10(47) Exemption

2F. (1) The Infrastructure Debt Fund shall be set up as a

Non-Banking Financial Company conforming to and satisfying the

conditions provided by the Reserve Bank of India in the

Infrastructure Development Fund - Non-Banking Financial

Companies (Reserve Bank) Directions, 2011, vide notification No.

DNBS.233/CGM (US)-2011, dated the 21st November, 2011.

(2) The funds of Infrastructure Debt Fund shall be invested only

in the Public Private Partnership Infrastructure Projects and

Post Commencement Operation Date Infrastructure Projects which

have completed at least one year of satisfactory commercial

operation and such Infrastructure Debt Fund is a party to

tripartite agreement with the concessionaire and the project

authority for ensuring compulsory buy out and termination

payment.

(3) The Infrastructure Debt Fund shall issue rupee denominated

bonds or foreign currency bonds in accordance with the

directions of Reserve Bank of India (RBI) and the relevant

regulations under the Foreign Exchange Management (Transfer or

Issue of Security by a Person Resident outside India)

Regulations, 2000, as amended from time to time.

(4) The terms and conditions of any bond issued by the

Infrastructure Debt Fund shall be in accordance with the said

directions of the Reserve Bank of India and the regulations

referred to in sub-rule (3).

(5) In case of an investor in the aforesaid bond being a

non-resident, the original or initial maturity of bond, at time

of first investment by such non-resident investor, shall not be

less than a period of five years :

Provided that the investment made by a non-resident investor in

such bonds shall be subject to a lock in period of not less than

three years, but the non-resident investor may transfer the bond

to another non-resident investor within such lock in period.

(6) The investment made by the Infrastructure Debt Fund in an

individual project or project belonging to a group at any time,

shall not exceed twenty per cent of the corpus of the fund.

(7) No investment shall be made by the Infrastructure Debt Fund

in any project where its sponsor or the associate enterprise or

the group of such sponsor has a substantial interest.

(8) The Infrastructure Debt Fund shall file its return of income

as required by sub-section (4C) of section 139 on or before the

due date.

(9) In case the Infrastructure Debt Fund does not fulfil any of

the conditions provided in this rule or directions of the

Reserve Bank of India, all provisions of the Act shall apply as

if it is not an Infrastructure Debt Fund referred to in clause

(47) of section 10 of the Act.

Explanation.-For the purpose of this rule,-

(i) "associate enterprise" shall have the same meaning as

assigned to it in section 92A of the Act;

(ii) "concern" shall have the same meaning as in clause (a) of

Explanation 3 of *sub-section (22) of section 2 of the Act;

(iii) "concessionaire", "tripartite agreement" and "project

authority" respectively shall have the same meaning as assigned

to them in the Infrastructure Debt Fund - Non-Banking Financial

Companies (Reserve Bank) Directions, 2011;

(iv) "corpus" means the total funds of the Infrastructure Debt

Fund raised for the purpose of investment;

(v) "group" means a group as defined in clause (mm) of section 2

of Securities and Exchange Board of India (Mutual Funds)

Regulations, 1996;

(vi) a person shall be deemed to have substantial interest in-

(a) a company if he is the beneficial owner (including

beneficial ownership held by one or more of his relatives, in

case the person is an individual) of shares (not being the

shares entitled to a fixed rate of dividend whether with or

without a right to participate in profits) holding not less than

10 per cent of the voting power; or

(b) a concern other than a company if he is, at any time during

the previous year, beneficially entitled to not less than 20 per

cent of the income of such concern;

(vii) "relative", in relation to an individual, means-

(a) spouse of the individual;

(b) brother or sister of the individual;

(c) brother or sister of the spouse of the individual;

(d) brother or sister of either of the parents of the

individual;

(e) any lineal ascendant or descendant of the individual;

(f) any lineal ascendant or descendant of the spouse of the

individual;

(g) spouse of the persons referred to in sub-clauses (b) to (f);

or

(h) any lineal descendant of a brother or sister of either the

individual or of the spouse of the individual;

(viii) "sponsor" means a non-banking financial company, or a

bank which is allowed to act as sponsor of Infrastructure Debt

Fund in accordance with the directions of Reserve Bank of India.