• What is an Alternate Investment Fund ("AIF")?

    Alternative Investment Fund or AIF means any fund established or incorporated in India which is a privately pooled investment vehicle which collects funds from sophisticated investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors. AIF does not include funds covered under the SEBI (Mutual Funds) Regulations, 1996, SEBI (Collective Investment Schemes) Regulations, 1999 or any other regulations of the Board to regulate fund management activities. Further, certain exemptions from registration are provided under the AIF Regulations to family trusts set up for the benefit of 'relatives‘ as defined under Companies Act, 1956, employee welfare trusts or gratuity trusts set up for the benefit of employees, 'holding companies‘ within the meaning of Section 4 of the Companies Act, 1956 etc.

    Please refer to section 2(b) of SEBI (Alternative Investment Funds) Regulations, 2012 at link for more information.

  • In what categories can an applicant seek registration as an AIF?

    Applicants can seek registration as an AIF in one of the following categories, and in sub-categories thereof, as may be applicable: [Ref. Regulation 3(4)] a) Category I AIF: o Venture capital funds (Including Angel Funds) o SME Funds o Social Venture Funds o Infrastructure funds b) Category II AIF c) Category III AIF.

    Please refer to section 3(4) of SEBI (Alternative Investment Funds) Regulations, 2012 at the link for more information.

  • What are Category I AIFs?

    AIFs which invest in start-up or early stage ventures or social ventures or SMEs or infrastructure or other sectors or areas which the government or regulators consider as socially or economically desirable and shall include venture capital funds, SME Funds, social venture funds, infrastructure funds and such other Alternative Investment Funds as may be specified.

    Please refer to section 3(4)(a) of SEBI (Alternative Investment Funds) Regulations, 2012 at link for more information.

  • What are Category II AIFs?

    AIFs which do not fall in Category I and III and which do not undertake leverage or borrowing other than to meet day-to-day operational requirements and as permitted in the SEBI (Alternative Investment Funds) Regulations, 2012. Various types of funds such as real estate funds, private equity funds (PE funds), funds for distressed assets, etc. are registered as Category II AIFs.

    Please refer to section 3(4)(b) of SEBI (Alternative Investment Funds) Regulations, 2012 at link for more information.

  • What are Category III AIFs?

    AIFs which employ diverse or complex trading strategies and may employ leverage including through investment in listed or unlisted derivatives. Various types of funds such as hedge funds, PIPE Funds, etc. are registered as Category III AIFs.

    Please refer to section 3(4)(c) of SEBI (Alternative Investment Funds) Regulations, 2012 at link for more information.

  • What is 'Angel Fund'?

    "Angel fund” is a sub-category of Venture Capital Fund under Category I Alternative Investment Fund that raises funds from angel investors and invests in accordance with the provisions of Chapter III-A of AIF Regulations. In case of an angel fund, it shall only raise funds by way of issue of units to angel investors. "Angel investor" means any person who proposes to invest in an angel fund and satisfies one of the following conditions, namely,

    (a) an individual investor who has net tangible assets of at least two crore rupees excluding value of his principal residence, and who:

               (i) has early stage investment experience, or

               (ii) has experience as a serial entrepreneur, or

               (iii) is a senior management professional with at least ten years of experience;

    (b) a body corporate with a net worth of at least ten crore rupees; or

    (c) an AIF registered under these regulations or a VCF registered under the SEBI (Venture Capital Funds) Regulations, 1996 Angel funds shall accept, up to a maximum period of 3 years, an investment of not less than INR 25 lakh from an angel investor.

    Please refer to section Chapter III-A of SEBI (Alternative Investment Funds) Regulations, 2012 at link for more information.

  • What is 'debt fund'?

    Debt fund is an Alternative Investment Fund (AIF) which invests primarily in debt or debt securities of listed or unlisted investee companies according to the stated objectives of the Fund. These funds are registered under Category II. In this regard, it is clarified that, since Alternative Investment Fund is a privately pooled investment vehicle, the amount contributed by the investors shall not be utilised for purpose of giving loans.

    Please refer to section 2(1)(i) of SEBI (Alternative Investment Funds) Regulations, 2012 at link for more information.

  • What is Fund of Funds?

    Fund of Funds, in general parlance as gathered from publicly available sources is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities. In the context of AIFs, a Fund of Fund is an AIF which invest in another AIF.

    Please refer to link for more information.

  • In which legal forms can an AIF be set up?

    An AIF under the SEBI (Alternative Investment Funds) Regulations, 2012 can be established or incorporated in the form of a trust or a company or a limited liability partnership or a body corporate. Most of the AIFs registered with SEBI are in trust form.

    Please refer to section 2(1)(b) of SEBI (Alternative Investment Funds) Regulations, 2012 at link for more information.

  • What is the limit specified under AIF regulations for number of investors?

    No scheme of an AIF (other than angel fund) shall have more than 1000 investors. (Please note that the provisions of the Companies Act, 1956 shall apply to the AIF if it is formed as a company). In case of an angel fund, no scheme shall have more than two hundred angel investors. However, an AIF cannot make invitation to the public at large to subscribe its units and can raise funds from the sophisticated investors only through private placement.

    Please refer to section 4(b), 10(f) and 19E(4) of SEBI (Alternative Investment Funds) Regulations, 2012 at the link for more information

  • What is meant by External Commercial Borrowings?

    ECBs are commercial loans raised by eligible resident entities from recognised non-resident entities conforming to parameters such as minimum maturity, permitted and non-permitted end-uses, maximum all-in-cost ceiling, etc.

  • What is the ECB Framework?

    The framework for raising loans through ECB comprises the following three tracks:

    Track I : Medium term foreign currency denominated ECB with minimum average maturity of 3/5 years.

    Track II : Long term foreign currency denominated ECB with minimum average maturity of 10 years.

    Track III : Indian Rupee (INR) denominated ECB with minimum average maturity of 3/5 years.

    Please refer to section 2.1 of link for more information.

  • What are the various forms of ECB?

    i) Loans including bank loans. 

    ii) Securitized instruments (e.g. floating rate notes and fixed rate bonds, nonconvertible, optionally convertible or partially convertible preference shares / debentures).

    iii) Buyers’ credit.

    iv) Suppliers’ credit.

    v) Foreign Currency Convertible Bonds (FCCBs).

    vi) Financial Lease.

    vii) Foreign Currency Exchangeable Bonds (FCEBs).

    Please refer to section 2.2 of link for more information.

  • What are the available routes for raising ECB?

    ECBs can be raised either under the automatic route or under the approval route. For the automatic route, the cases are examined by the Authorised Dealer Category-I (AD Category-I) banks. Under the approval route, the prospective borrowers are required to send their requests to the RBI through their ADs for examination. While the regulatory provisions are mostly similar, there are some differences in the form of amount of borrowing, eligibility of borrowers, permissible end-uses, etc. under the two routes. While the first six forms of borrowing, mentioned Q3 can be raised both under the automatic and approval routes, FCEBs can be issued only under the approval route.

    Please refer to section 2.3 at the following link.

  • What is the minimum Average Maturity Period of ECBs?

    Track I:

    i) 3 years for ECB up to $ 50 million or its equivalent.

    ii) 5 years for ECB beyond $ 50 million or its equivalent.

    iii) 5 years for eligible borrowers (Companies in infrastructure sector, Non-Banking Financial Companies - Infrastructure Finance Companies (NBFCIFCs), NBFCs-Asset Finance Companies (NBFC-AFCs), Holding Companies and Core Investment Companies (CICs)) irrespective of the amount of borrowing.

    iv) 5 years for Foreign Currency Convertible Bonds (FCCBs)/ Foreign Currency Exchangeable Bonds (FCEBs) irrespective of the amount of borrowing. The call and put option, if any, for FCCBs shall not be exercisable prior to 5 years.

    Track II: 10 years irrespective of the amount

    Track III: Same as under Track I.

    Please refer to section 2.4.1 at the following link.

  • Can ECB be used for real estate activities?

    No. No activity under real estate is permitted as eligible end use for raising ECB.

  • Can shipping/airlines companies raise ECB under Track I for import of second hand vessels?

    Yes, only under the approval route.

  • Is ECB permitted for import of services?

    No, ECB is not permitted for import of services

  • Can ECB be availed for repayment of domestic INR loan?

    Yes, provided the ECB is raised under the Track II and III of the ECB framework. However, it is not permitted for NBFCs, developers of SEZs/NMIZs, NBFC-MFIs, NGOs and not for profit companies.

    Please refer to link1 or link2 for more information.

  • Can ECB be availed for making contribution in LLP?

    No, it is not permitted to avail ECBs for LLPs.

  • What is a Sponsored ADR/ GDR issue?

    Divestment by shareholders of their holdings of Indian companies, in the overseas markets would be allowed through the mechanism of Sponsored ADR/GDR issue in respect of:-
    a) Divestment by shareholders of their holdings of Indian companies listed in India;
    b) Divestment by shareholders of their holdings of Indian companies not listed in India but which are listed overseas.
    The process of divestment would be initiated by such Indian companies whose shares are being offered for divestment in the overseas market by sponsoring ADR/GDR issues against the block of existing shares offered by the shareholders under the provisions of these guidelines.
    Under this mechanism, the company offers its resident shareholders a choice to submit their shares back to the company so that on the basis of such shares, ADRs/GDRs can be issued abroad. The proceeds of the ADR/GDR issue are remitted back to India and distributed among the resident investors who had offered their Rupee denominated shares for conversion. These proceeds can be kept in Resident Foreign Currency (Domestic) accounts in India by the resident shareholders who have tendered such shares for conversion into ADRs/GDRs.
     

    Please refer to the link for more details.

  • Can an Indian Company Issue “employees’ stock option” and/or “sweat equity shares?

    "Yes, an Indian company may issue “employees’ stock option” and/or “sweat equity shares” to its employees/ directors or employees/directors of its holding company or joint venture or wholly owned overseas subsidiary/subsidiaries who are resident outside India, provided that :
    a. The scheme has been drawn either in terms of regulations issued under the Securities Exchange Board of India Act, 1992 or the Companies (Share Capital and Debentures) Rules, 2014 notified by the Central Government under the Companies Act 2013, as the case may be.
    b. The “employee’s stock option”/ “sweat equity shares” issued to non-resident employees/directors under the applicable rules/regulations are in compliance with the sectoral cap applicable to the said company.
    c. Issue of “employee’s stock option”/ “sweat equity shares” by a company where foreign investment is under the approval route shall require prior approval of Government of India.
    d. Issue of “employee’s stock option”/ “sweat equity shares” under the applicable rules/regulations to an employee/director who is a citizen of Bangladesh/Pakistan shall require prior approval of the Government of India.
    e. The issuing company shall furnish to the Regional Office concerned of the Reserve Bank of India under whose jurisdiction the registered office of the company operates, within 30 days from the date of issue of employees’ stock option or sweat equity shares, a return as per the Form-ESOP."

  • What is the procedure for reporting of issue of shares?

    i) The Indian company has to file Form FC-GPR, not later than 30 days from the date of issue of shares.

    ii) Form FC-GPR has to be duly filled up and signed by Managing Director/Director/Secretary of the Company and submitted to the Authorized Dealer of the company, who will forward it to the Reserve Bank.

    The following documents have to be submitted along with the form:

    a) A certificate from the Company Secretary of the company certifying that:

    A) All the requirements of the Companies Act, as applicable, have been complied with.

    B) Terms and conditions of the Government of India approval, if any, have been complied with.

    C) The company is eligible to issue shares under these Regulations.

    D) The company has all original certificates issued by authorized dealers in India evidencing receipt of amount of consideration.

    b) A certificate from SEBI registered Merchant Banker or Chartered Accountant indicating the manner of arriving at the price of the shares isIndiad to the persons resident outside India.

    c) The report of receipt of consideration as well as Form FC-GPR have to be submitted by the AD Category-I bank to the Regional Office concerned of the Reserve Bank under whose jurisdiction the registered office of the company is situated.

    d) Annual return on Foreign Liabilities and Assets (Section-3) should be filed on an annual basis by the Indian company, directly with the Reserve Bank. This is an annual return to be submitted by 15th of July every year, pertaining to all investments by way of direct/portfolio investments/reinvested earnings/other capital in the Indian company made during the previous years (i.e. the information submitted by 15th July will pertain to all the investments made in the previous years up to March 31). The details of the investments to be reported would include all foreign investments made into the company which is outstanding as on the balance sheet date. The details of overseas investments in the company both under direct/portfolio investment may be separately indicated.

    e) Issue of bonus/rights shares or stock options to persons resident outside India directly or on amalgamation/merger/demerger with an existing Indian company, as well as issue of shares on conversion of ECB/royalty/lump-sum technical know-how fee/import of capital goods by units in SEZs, has to be reported in Form FC-GPR.

    Please refer to the Consolidated FDI Policy at link for more information.

  • What is the procedure for reporting of transfer of shares?

    Reporting of transfer of shares between residents and non-residents and vice- versa is to be done in Form FC-TRS (Section-4). The Form FC-TRS should be submitted to the AD Category-I bank, within 60 days from the date of receipt of the amount of consideration. The onus of submission of the Form FC-TRS within the given timeframe would be on the transferor/transferee, resident in India. However, in cases where the NR investor, including an NRI, acquires shares on the stock exchanges under the FDI scheme, the investee company would have to file form FC-TRS with the AD Category-I bank. The AD Category-I bank, would forward the same to its link office. The link office would consolidate the Form FC-TRS and submit a monthly report to the Reserve Bank. Please refer to the Consolidated FDI Policy 2017 at link for more information.

  • How should I report the issue of shares against conversion of ECB?

    Details of issue of shares against conversion of ECB have to be reported to the concerned regional office of the RBI, as indicated below:

    i) In case of full conversion of ECB into equity, the company shall report the conversion in Form FC-GPR to the regional office of the Reserve Bank as well as in Form ECB-2 to the Department of Statistics and Information Management (DSIM), Reserve Bank of India, Bandra-Kurla Complex, Mumbai- 400 051, within seven working days from the close of month to which it relates. The words "ECB wholly converted to equity" shall be clearly indicated on top of the Form ECB-2. Once reported, filing of Form ECB-2 in the subsequent months is not necessary.

    ii) In case of partial conversion of ECB, the company shall report the converted portion in Form FC-GPR to the Regional Office concerned as well as in Form ECB-2 clearly differentiating the converted portion from the non-converted portion. The words "ECB partially converted to equity" shall be indicated on top of the Form ECB-2. In the subsequent months, the outstanding balance of ECB shall be reported in Form ECB-2 to DSIM.

    Please refer to subsection 2.4 of Annexure-6 of Consolidated FDI Policy at link for more information.

  • What are the reporting requirements for FCCB/DR Issues?

    The domestic custodian shall report the issue/transfer of sponsored/unsponsored depository receipts as per DR Scheme 2014 in ‘Form DRR’ within 30 days of close of the issue/ program.

    Please refer to subsection 2.5 of Annexure 6 of Consolidated FDI Policy at link for more information.

  • What is the timeline for issuing capital instruments after receiving inward remittances?

    The capital instruments should be issued within 180 days from the date of receipt of the inward remittance received through normal banking channels including escrow account opened and maintained for the purpose or by debit to the NRE/FCNR (B) account of the non-resident investor. In case, the capital instruments are not issued within 180 days from the date of receipt of the inward remittance or date of debit to the NRE/FCNR (B) account, the amount of consideration so received should be refunded immediately to the non-resident investor by outward remittance through normal banking channels or by credit to the NRE/FCNR (B) account, as the case may be. Non-compliance with the above provision would be reckoned as a contravention under FEMA and would attract penal provisions. In exceptional cases, refund of the amount of consideration outstanding beyond a period of 180 days from the date of receipt may be considered by the RBI, on the merits of the case.

    Please refer to subsection-1 of Annexure-3 of Consolidated FDI Policy at link for more information.

  • In what cases prior permission of RBI is required for transfer of capital instruments?

    The following cases require prior approval of RBI:

    i) Transfer of capital instruments from resident to non-residents by way of sale where:

    a) Transfer is at a price which falls outside the pricing guidelines specified by RBI;

    b) Transfer of capital instruments by the non-resident acquirer involving deferment of payment of the amount of consideration.

    ii) Transfer of any capital instrument, by way of gift by a person resident in India to a person resident outside India.

    Please refer to subsection 5.1 of Annexure-3 of Consolidated FDI Policy at link for more information.

  • What are the conditions for conversion of ECB/Lump sum Fee/Royalty etc. into Equity?

    Indian companies have been granted general permission for conversion of External Commercial Borrowings (ECB) (excluding those deemed as ECB) in convertible foreign currency into equity shares/fully compulsorily and mandatorily convertible preference shares, subject to the following conditions and reporting requirements:

    a) The activity of the company is covered under the Automatic Route for FDI or the company has obtained Government approval for foreign equity in the company;

    b) The foreign equity after conversion of ECB into equity is within the sectoral cap, if any;

    c) Pricing of shares is as per the provision of para 2 of the Consolidated FDI Policy;

    d) Compliance with the requirements prescribed under any other statute and regulation in force; and

    e) The conversion facility is available for ECBs availed under the Automatic or Government Route and is applicable to ECBs, due for payment or not, as well as secured/unsecured loans availed from non-resident collaborators.

    Please refer to subsection 6 of Annexure-3 of Consolidated FDI Policy at link for more information.

  • What all is covered for Issuing equity shares under the FDI policy under the Government route?

    Issue of equity shares under the FDI policy is allowed under the Government route for the following:

    1) Import of capital goods/ machinery/ equipment (excluding second-hand machinery).

    2) Pre-operative/pre-incorporation expenses (including payments of rent etc.).

    This is subject to compliance conditions as mentioned in consolidated FDI Policy.

    Please refer to subsection 6(iii) of Annexure-3 of Consolidated FDI Policy at link for more information.

  • How do banks assess the working capital requirements of borrowers?

    The banks have been advised to put in place loan policies governing extension of credit facilities for the MSE sector duly approved by their Board of Directors (Refer circular RPCD.SME & NFS.BC.No.102/06.04.01/2008-09 dated 4 May  2009). However, banks have been advised to sanction limits after proper appraisal of the genuine working capital requirements of the borrowers keeping in mind their business cycle and short term credit requirement. As per Nayak Committee Report, working capital limits to SSI units is computed on the basis of minimum 20% of their estimated turnover up to credit limit of $ .7 million. For more details paragraph 4.15.2 of the Master Circular on lending to the MSME sector dated 1 July 2014 may please be seen.


    For further details please visit link1 or link2.

     

  • Is there any provision for grant of composite loans by banks?

    A composite loan limit of $ 1.5 million can be sanctioned by banks to enable the MSME entrepreneurs to avail of their working capital and term loan requirement through Single Window in terms of RBI Master Circular on lending to the MSME sector dated 1 July 2010. All scheduled commercial banks have been advised by circular RPCD.SME&NFS. BC.No.102/06.04.01/2008-09 on 4 May 2009 that the banks which have sanctioned term loan singly or jointly must also sanction working capital (WC) limit singly (or jointly, in the ratio of term loan) to avoid delay in commencement of commercial production thereby ensuring that there are no cases where term loan has been sanctioned and working capital facilities are yet to be sanctioned. These instructions have been reiterated to schedule commercial banks on 11 March 2010.


    For further details please visit link1or link2.

  • What are the RBI guidelines on interest rates for loans disbursed by the commercial banks?

    As part of the financial sector liberalisation, all credit related matters of banks including charging of interest have been deregulated by RBI and are governed by the banks' own lending policies. With a view to enhancing transparency in lending rates of banks and enabling better assessment of transmission of monetary policy, all scheduled commercial banks had been advised in terms of circular DBOD.No.Dir.BC.88/13.03.00/2009-10 on April 9, 2010 to introduce the Base Rate system w.e.f. 1 July  2010. Accordingly, the Base Rate System has replaced the BPLR system with effect from July 1, 2010. All categories of loans should henceforth be priced only with reference to the Base Rate.


    For further details please visit link1 or link2.

  • Why is credit rating of the micro small borrowers important?

    With a view to facilitating credit flow to the MSME sector and enhancing the comfort-level of the lending institutions, the credit rating of MSME units done by reputed credit rating agencies should be encouraged. Banks are advised to consider these ratings as per availability and wherever appropriate structure their rates of interest depending on the ratings assigned to the borrowing SME units.

  • Is credit rating mandatory for the MSE borrowers?

    Credit rating is not mandatory but it is in the interest of the MSE borrowers to get their credit rating done as it would help in credit pricing that is cost of funds (interest and other charges etc.) of the loans taken by them from banks

  • What are the guidelines for delayed payment of dues to the MSE borrowers?

    The buyer is to make payment on or before the date agreed on between him and the supplier in writing or, in case of no agreement, before the appointed day. The agreement between seller and buyer shall not exceed more than 45 days. If the buyer fails to make payment of the amount to the supplier, he shall be liable to pay compound interest with monthly rests to the supplier on the amount from the appointed day or, on the date agreed on, at three times of the Bank Rate notified by Reserve Bank. For any goods supplied or services rendered by the supplier, the buyer shall be liable to pay the interest as advised above. In case of dispute with regard to any amount due, a reference shall be made to the Micro and Small Enterprises Facilitation Council, constituted by the respective State Government. To take care of the payment obligations of large corporate borrowers to MSEs, banks have been advised that while sanctioning/ renewing credit limits to their large corporate borrowers (i.e. borrowers enjoying working capital limits of $ 1.5 million and above from the banking system), to fix separate sub-limits, within the overall limits, specifically for meeting payment obligations in respect of purchases from MSEs either on cash basis or on bill basis. Banks are also advised by RBI to closely monitor the operations in the sub-limits, particularly with reference to their corporate borrowers’ dues to MSE units by ascertaining periodically from their corporate borrowers, the extent of their dues to MSE suppliers and ensuring that the corporate pay off such dues before the ‘appointed day’ /agreed date by using the balance available in the sub-limit so created. In this regard the relevant RBI circular; IECD/5/08.12.01/2000-01 dated October 16, 2000 (reiterated on May 30, 2003, vide circular No. IECD.No.20/08.12.01/2002-03 ) available on RBI website.

    For further details please visit link1 or link2.

  • What is debt restructuring of advances?

    A viable/potentially viable unit may apply for a debt restructuring if it shows early stage of stickiness. In such cases the banks may consider to reschedule the debt for repayment, consider additional funds etc. A debt restructuring mechanism for units in MSME sector has been formulated and advised to all commercial banks. The detailed guidelines have been issued to ensure restructuring of debt of all eligible small and medium enterprises. Prudential guidelines on restructuring of advances have also been issued which harmony the prudential norms over all categories of debt restructuring mechanisms (other than those restructured on account of natural calamities). The relevant circulars in this regard are circular DBOD.BP.BC.No.34/21.04.132/2005-06 dated September 8, 2005 and circular DBOD.No.BP.BC.37/21.04.132/2008-09 dated August 27, 2008 which are available on the website. 

    For further details please visit link1 or link2.

  • Are all sick units put under rehabilitation by banks?

    No. If a sick unit is found potentially viable it can be rehabilitated by the banks. The viability of the unit is decided by banks. A unit should be declared unviable only if such a status is evidenced by a viability study.

  • Is there a time frame within which the banks are required to implement the rehabilitation package?

    Viable / potentially viable MSE units/enterprises, which turn sick in spite of debt re-structuring would need to be rehabilitated and put under nursing. It will be for the banks/financial institutions to decide whether a sick MSE unit is potentially viable or not. The rehabilitation package should be fully implemented by banks within six months from the date the unit is declared as potentially viable/viable. During this six months period of identifying and implementing rehabilitation package banks/FIs are required to do “holding operation” which will allow the sick unit to draw funds from the cash credit account at least to the extent of deposit of sale proceeds. The relevant circular on rehabilitation of sick units is RPCD.CO.MSME & NFS.BC.40/06.02.31/2012-2013 dated November 1, 2012 is available online.

    For further details please visit link1 or link2.

  • What is MUDRA?

    MUDRA, which stands for Micro Units Development & Refinance Agency Ltd, is a financial institution being set up by Government of India for development and refinancing micro units enterprises. It was announced by the Hon’ble Finance Minister while presenting the Union Budget for FY 2016. The purpose of MUDRA is to provide funding to the non-corporate small business sector through various Last Mile Financial Institutions like Banks, NBFCs and MFIs.

  • Who are the target clients of MUDRA/ What kind of borrowers are eligible for assistance from MUDRA?

    Non–Corporate Small Business Segment (NCSB) comprising of millions of proprietorship / partnership firms running as small manufacturing units, service sector units, shopkeepers, fruits / vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others, in rural and urban areas.

    Please refer to link for more information.

  • What is the rate of interest on MUDRA loans?

    The interest rates are deregulated and the banks have been advised to charge reasonable interest rates within the overall RBI guidelines.

    Please refer to link for more information.

  • I have graduated recently. I want to start my own business. Can MUDRA help me?

    MUDRA loans are available in three categories. For small business, loans up to $ 768 is available under the ‘Shishu’ category and beyond $ 768 and up to $ 7678 under the ‘Kishor’ category. It also offers loans beyond $ 7679 and up to $ 15360 under the Tarun category. Depending on the nature of business and project requirement you can access finance from one of the intermediaries of MUDRA as per the norms.

    Please refer to Link for more information

  • I intend to work on franchisee model. Can MUDRA help me?

    MUDRA operates a special refinance scheme for traders and shopkeepers. You can avail the facilities under the scheme as per your requirements from any banks/MFIs/NBFCs in the area.

    Please refer to link for more information

  • What is the scope of PMMY and various types of loan available and which are the agencies that will provide loan?

    Pradhan Mantri Mudra Yojana (PMMY) loans will be extended by all Public Sector Banks such as PSU banks, Regional Rural Banks (RRBs), Cooperative Banks, Private Sector Banks, Foreign Banks, Micro Finance Institutions and Non Banking Finance Companies. All loans sanctioned on or after April 08, 2015 up to a loan size of $ 15,340 for non farm income generating activities will be branded as PMMY loans.

    Please refer to Link for more information

  • What is the eligibility of persons for availing MUDRA loans?

    Any Indian Citizen who has a business plan for a non farm income generating activity such as manufacturing, processing, trading or service sector whose credit need is less than $ 15340 can approach either a Bank, MFI or NBFC for availing of MUDRA loans under PMMY. The usual terms and conditions of the lending agency may have to be followed for availing of loans under PMMY. The lending rates are as per the RBI guidelines issued in this regard from time to time.

    Please refer to Link for more information

  • Is there any subsidy under PMMY? If so, details thereof?

    There is no subsidy for the loan given under PMMY. However, if the loan proposal is linked to some Government scheme, wherein the Govt. if providing capital subsidy, it will be eligible under PMMY also.

    Please refer to link for more information

  • What is MUDRA Card?

    MUDRA Card is an innovative credit product wherein the borrower can avail of credit in a hassle free and flexible manner. It will provide a facility of working capital arrangement in the form of CC/OD to the borrower. Since MUDRA Card will be RuPay debit card, it can be used for drawing cash from ATM or Business Correspondent or make purchase using Point of Sale (POS) machine. Facility is also there to repay the amount, as and when, surplus cash is available, thereby reducing the interest cost.

    Please refer to link for more information

  • What are the documents that are required to be submitted for availing loans under MUDRA?

    The terms and conditions of the loan will be governed by the rules of the lending institution and the broad guidelines of RBI. The guidance regarding the documents needed may be obtained from any of the lending institutions in your locality.

  • What qualifies as a 'Start-up' for the purpose of Government schemes?

    An entity shall be considered as a Startup:
    a) if it is incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India; and
    b) up to seven years from the date of its incorporation/ registration; however, in the case of Startups in the biotechnology sector, the period shall be up to 10 years from the date of its incorporation/ registration; and
    c) if its turnover for any of the financial years since incorporation/ registration has not exceeded $ 38,000; and
    d) if it is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.

    Provided that any such entity formed by splitting up or reconstruction of a business already in existence shall not be considered a ‘Startup’. 
    For additional information, refer notification, link.

  • For how long would recognition as a 'Start-up' be valid?

    An entity would cease to be a 'start-up' upon expiry of either of the following:
    a) 7 years from the date of its incorporation/ registration.
    b) If its turnover for any of the financial years has exceeded $ 38,000.

     

  • Whom should the queries regarding start-up be addressed to ?

    The queries could be address to the Start-up India Hub through the following details:
    Toll Free Number : 1800115565
    Working Hours :10:00 AM to 5:30 PM ( Monday to Friday )
    Email : dipp-startups@nic.in

  • What are Infrastructure Investment trusts (InvITs)?

    An Infrastructure Investment Trust (InvITs) is like a mutual fund, which enables direct investment of small amounts of money from possible individual/institutional investors in infrastructure to earn a small portion of the income as return. InvITs work like mutual funds or real estate investment trusts (REITs) in features. InvITs can be treated as the modified version of REITs designed to suit the specific circumstances of the infrastructure sector.

  • What is the procedure for registering as an InvIT?

    No person shall act as an InvIT unless it has obtained a certificate of registration from the Board under SEBI (Infrastructure Investment Trusts) Regulations 2014. An application for grant of certificate of registration as InvIT shall be made by the sponsor on behalf of the trust in Form A as specified in the Schedule I of SEBI (Infrastructure Investment Trusts) Regulations 2014 and shall be accompanied by a non-refundable application fee as specified in Schedule II. The Board on being satisfied that the applicant fulfils the requirements shall send intimation to the applicant and on receipt of the payment of registration fees as specified in Schedule II, grant certificate of registration in Form B under Schedule I.

    Please refer to section 3 and 6 of SEBI (Infrastructure Investment Trusts) Regulations 2014 at the link for more information.

  • What is meant by 'Eligible infrastructure project'?

    Eligible infrastructure project' means an infrastructure project which, prior to the date of its acquisition by, or transfer to, the InvIT, satisfies the following conditions:

    i) For PPP projects:

    a) the Infrastructure Project is a completed and revenue generating project, or the Infrastructure Project, which has achieved commercial operations date and does not have the track record of revenue from operations for a period of not less than one year.

    b) the Infrastructure Project is a pre-COD project:

    ii) In non-PPP projects, the infrastructure project has received all the requisite approvals and certifications for commencing construction of the project.

    Please refer to section 2(o) of SEBI (Infrastructure Investment Trusts) Regulations 2014 at link for more information.

  • What are the key conditions regarding qualification of Sponsor(s)?

    The term ‘sponsor’ means any company or LLP or body corporate which sets up the InvIT. Each sponsor must have a net worth of not less than US$15.38 mn if it is a body corporate or company; or Net tangible assets of value not less than US$15.38 mn in case of an LLP.

    The sponsor(s) together shall hold not less than 15% of total units of InvIT on a post-issue basis for a period of at least 3 years from the date of listing, subject to following:

    a) Sponsors would be responsible to the InvIT for all acts, omissions and representations/covenants;

    b) Sponsor/associate of the sponsor shall act as the project manager for a minimum period of 3 years unless a suitable replacement is appointed by unitholders. However, this conditions shall not apply if the sponsors hold a minimum of 25% stake on post-issue basis for at least 3 years from the date of listing

    c) Minimum experience of 5 years in infrastructure sector for each sponsor and where sponsor is a developer, at least 2 projects of sponsor should be completed.

    Please refer to section 4(d) of SEBI (Infrastructure Investment Trusts) Regulations 2014 at link for more information.

  • What are the key conditions regarding qualification of Investment Manager?

    The key conditions are:

    • Net worth (net tangible assets in case of an LLP) of not less than US$15.38 mn if the investment manager is a body corporate or a company.

    • Experience of not less than five years in fund management or advisory services or development in the infrastructure sector.

    • Has not less than two employees who have at least five years experience each, in fund management or advisory services or development in the infrastructure sector.

    • Has not less than one employee who has at least five years experience in the relevant sub-invest.

    • Has not less than half of its directors in case of a company or members of the governing board in case of an LLP as independent and not directors or members of the governing board of another InvIT.

    • Has an office in India from where the operations pertaining to the InvIT is proposed to be conducted.

    Please refer to section 4(e) of SEBI (Infrastructure Investment Trusts) Regulations 2014 at link for more information

  • What is the qualification criteria with regard to the Trustee in invITs?

    • The trustee is registered with the Board under Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 and is not an associate of the sponsor(s) or manager.

    • The trustee has such wherewithal with respect to infrastructure, personnel, etc. to the satisfaction of the Board and in accordance with circulars or guidelines as may be specified by the Board.

    Please refer to section 4(g) of SEBI (Infrastructure Investment Trusts) Regulations 2014 at link for more information.

  • What are the conditions regarding issue and allotment of units in InvITs?

    • An InvIT shall not make an initial offer of its units unless: • The InvIT is registered with the Board under these regulations; • The value of assets held by InvIT is at least INR 500 crores; • The offer size is at least INR 250 crores • Slabs for minimum offer size and public float: • If post issue capital is less than INR 1600 crores: minimum 25% of the total outstanding units of the InvIT or INR 250 crores, whichever is higher • If post issue capital is equal to or more than INR 1600 crores but less than INR 4000 crores: minimum INR 400 crores • If post issue capital is equal to more than INR 4,000 crores: minimum 10% of the total outstanding units of the InvIT • Any units offered to sponsor or manger or their related parties or their associates shall not be counted towards units offered to public • Public float in all cases shall be increased to a minimum of 25% within a period of three years from the date of listing • In case of a privately places InvIT, minimum investment from an investor should be INR 1 crore. However, if such InvIT invests or proposes to invest 80% or more of the value of InvIT assets, minimum investment from an investor shall be INR 25 crore • In case of a public InvIT, minimum subscription from an investor in initial and follow on offer to be INR 10 lakh • Maximum 10% of the amount raised by InvIT by public issue of units could be used for ‘general purposes’ as mentioned in the offer document. Issue related expenses shall not form part of general purpose. • Minimum subscription amount shall be 90% of the fresh issue size as specified in the offer document • If the InvIT fails to make any offer of its units, whether by way of public issue or private placement, within 3 years from the date of registration with the Board, it shall surrender its certificate of registration to the Board and cease to operate as an InvIT Please refer to Chapter IV of SEBI (Infrastructure Investment Trusts) Regulations 2014 at link for more information

  • What are the investment conditions for InvITs?

    For the investment conditions, one may refer to Chapter V of the InvIT Regulations at the link. 

  • What are the requirements regarding disclosures under InvIT regulations?

    • A privately placed InvIT shall ensure that disclosures in the placement memorandum are in accordance with the sub-regulation (4) of regulation 15 and any circulars or guidelines issued by the Board in this regard. • A publicly offered InvIT shall ensure that the disclosures in the offer document are in accordance with the Schedule III and any circulars or guidelines issued by the Board in this regard. • The investment manager of all InvITs shall submit an annual report to all unit holders electronically or by physical copies and to the designated stock exchanges within three months from the end of the financial year and half-yearly report to the designated stock exchange within forty five days from the end of the every half year ending March 31st and September 30th. Such annual and half yearly reports shall contain disclosures as specified under Schedule IV. • The investment manager shall disclose to the designated stock exchanges any information having bearing on the operation or performance of the InvIT as well as price sensitive information Please refer to section 23 of SEBI (Infrastructure Investment Trusts) Regulations 2014 at link for more information

  • Which are the registered InvITs under SEBI?

    The list of SEBI registered InvITs as on February 16, 2017 is available at the link.

  • What are the different kinds of issues which can be made by an Indian company in India?

    The different kind of issues which can be made by an Indian company in India are illustrated below:
    1) Public Issue: Includes Initial Public Offering (IPO) & Further Public Offering (FPO)
    2) Rights Issue
    3) Composite Issue
    4) Bonus Issue
    5) Private Placement: Includes Preferential issue, Qualified Institutional Placement
    6) Institutional Placement Program

  • What is a Public Issue?

    A Public Issue is an issue / offer of shares or convertible securities made available to new investors for becoming part of shareholders’ family of the issuer. It further includes:
    1) IPO: an unlisted company making either a fresh issue of shares or convertible securities offers its existing shares or convertible securities for sale or both for the first time to the public. Issuer’s shares or convertible securities can now be listed or traded on Stock Exchanges.
    2) FPO: an already listed company making either a fresh issue of shares or CS to the public or an offer for sale to the public.

  • What is a Right Issue?

    A Right Issue is an issue of shares or convertible securities to existing shareholders as on a particular date (record date) fixed by the issuer. The rights are offered in a particular ratio to the number of shares or convertible securities held as on the record date.

  • What is a Composite Issue?

    A Composite Issue is an issue of shares or Convertible Securities on Public-cum-Right basis, wherein the allotment in both Public Issue and Rights Issue is proposed to be made simultaneously.

  • What is a Bonus Issue?

    A Bonus Issue is an issue of shares to its existing shareholders without any consideration based on the number of shares already held by them as on a record date. The shares are issued out of the company’s Free Reserve or Share Premium Account in a particular ratio to the number of securities held on a record date.

  • What is a Private Placement?

    A Private Placement is the issue of shares or convertible securities to a select group of persons not exceeding 49. It is neither a Rights Issue nor a Public Issue. Private Placement can be of three types namely:

    1) Preferential allotment: When a listed issuer issues shares or convertible securities, to a select group of persons in terms of provisions of Chapter VII of SEBI (ICDR) Regulations, 2009, it is called a preferential allotment. The issuer is required to comply with various provisions which inter‐alia include pricing, disclosures in the notice, lock‐in etc., in addition to the requirements specified in the Companies Act.

    2) Qualified institutions placement (QIP): When a listed issuer issues equity shares or non-convertible debt instruments along with warrants and convertible securities other than warrants to Qualified Institutions Buyers only, in terms of provisions of Chapter VIII of SEBI (ICDR) Regulations, 2009, it is called a QIP.

    3) Institutional Placement Programme (IPP): When a listed issuer makes a further public offer of equity shares, or offer for sale of shares by promoter/promoter group of listed issuer in which the offer, allocation and allotment of such shares is made only to qualified institutional buyers in terms Chapter VIII A of SEBI (ICDR) Regulations, 2009 for the purpose of achieving minimum public shareholding, it is called an IPP.

  • What is an Offer Document?

    Offer document’ is a document which contains all the relevant information about the company, promoters, projects, financial details, objects of raising the money, terms of the issue, etc. and is used for inviting subscription to the issue being made by the issuer. Offer Document’ is called “Prospectus” in case of a Public Issue and “Letter of Offer” in case of a Rights Issue.

  • What is a Draft Offer Document, Red Herring Prospectus, Prospectus and Letter of Offer? How are they different from one another?

    1) Draft Offer Document : It is an offer document filed with SEBI for specifying changes, if any, in it, before it is filed with the Registrar of Companies (ROCs).

    2) Red Herring Prospectus: It is an offer document used in case of a Book Built Public Issue. It contains all the relevant details except that of price or number of shares being offered. It is filed with RoC before the issue opens.

    3) Prospectus: It is an offer document in case of a Public Issue, which has all relevant details including price and number of shares or Convertible Securities being offered. This document is registered with RoC before the issue opens in case of a fixed price issue and after the closure of the issue in case of a Book Built issue.

    4) Letter of offer: It is an offer document in case of a Rights Issue of shares or Convertible Securities and is filed with stock exchanges before the issue opens.

  • Is a listed company making a rights issue required to satisfy any entry norm?

    No, there is no entry norm for a listed company making a Rights Issue.

  • Are there any mandatory provisions which an issuer is expected to comply before making an issue?

    Yes, there are mandatory provisions which an issuer is expected to comply before making an issue w.r.t. Minimum Promoter’s contribution and lock‐in period:
    1) Public issue by an Unlisted Issuer: Promoters shall contribute not less than 20% of the post issue capital which should be locked in for a period of 3 years. The remaining pre issue capital of the promoters should also be locked in for a period of 1 year from the date of listing.
    2) Public issue by a Listed Issuer: Promoters shall contribute not less than 20% of the post issue capital or 20% of the issue size.

    Please refer to page 8 of link1 or clause 32 and 36 of link2 for more information.

  • What is the procedure of obtaining registration as a ReIT from SEBI?

    No person shall act as a REIT unless it is registered with the Board under SEBI (Real Estate Investment Trusts) Regulations 2014. An application for grant of certificate of registration as REIT shall be made, by the sponsor on behalf of the trust in Form A as specified in the Schedule I to these regulations and shall be accompanied by a non-refundable application fee of such amount and shall be payable in the manner as specified in Schedule II to these regulations. The Board on being satisfied that the applicant fulfils the requirements shall send intimation to the applicant and on receipt of the payment of registration fees as specified in Schedule II, grant certificate of registration in Form B under Schedule I.

    Please refer to section 3 and 6(1) of SEBI (Real Estate Investment Trusts) Regulations 2014 at link for more information.

  • What is meant by 'real estate' or 'Property'?

    'Real estate' or 'property' means land and any permanently attached improvements to it, whether leasehold or freehold and includes buildings, sheds, garages, fences, fittings, fixtures, warehouses, car parks, etc. and any other assets incidental to the ownership of real estate but does not include mortgage. However, any asset falling under the purview of 'infrastructure' as defined vide Notification of Ministry of Finance dated October 07, 2013 including any amendments or additions made thereof shall not be considered as 'real estate' or 'property'. Notwithstanding the above, following captured within the above mentioned definition of infrastructure shall be considered under “real estate” or “property”:

    i) Hotels, hospitals and convention centers, forming part of composite real estate projects, whether rent generating or income generating

    ii) Common infrastructure" for composite real estate projects, industrial parks and SEZ.

    Please refer to section 2(zi) of SEBI (Real Estate Investment Trusts) Regulations 2014 at link for more information.

  • What is the qualification criteria with regard to the Sponsor(s) in ReITs?

    The term ‘sponsor group’ has been defined to include:

    • The sponsor

    • Where the sponsor is a body corporate.

    • Entities/persons controlled by such body corporate.

    • Entities/persons controlling such body corporate.

    • Entities/persons controlled by entities/persons controlling such body corporate. 

    • Where the sponsor is an individual.

    • Relatives of such individual.

    • Entities/controlled by such individual for each sponsor group, not less than one person shall be identified as the 'sponsor'. Sponsors and the sponsor group shall collectively hold.

    • A minimum of 25% of the total units on a post issue basis

    • A minimum of 15% of the outstanding units of the REIT at all times.

    • Minimum holding of 5% of outstanding units of REIT at all time.

    • Net worth of at least US$ 15.38 mn on consolidated basis and US$307,692  on individual basis.

    • Minimum experience of 5 years in real estate industry for each sponsor and where sponsor is a developer, at least 2 projects of sponsor should be completed.

    Please refer to section 4(d) and chapter IV of SEBI (Real Estate Investment Trusts) Regulations 2014 at link for more information.

  • What is the qualification criteria with regard to the Managers in ReITs?

    The criteria is as follows:

    i) The manager has a net worth of not less than US$ 1.53 mn if the manager is a body corporate or a company or net tangible assets of value not less than US$ 1.53 mn in case the manager is a LLP.

    ii) The manager or its associate has not less than five years experience in fund management or advisory services or property management in the real estate industry or in development of real estate.

    iii) The manager has not less than two key personnel who each have not less than five years experience in fund management or advisory services or property management in the real estate industry or in development of real estate.

    iv) The manager has not less than half, of its directors in the case of a company or of members of the governing Board in case of an LLP, as independent and not directors or members of the governing Board of another REIT.

    Please refer to section 4(e) of SEBI (Real Estate Investment Trusts) Regulations 2014 at link for more information.

  • What is the qualification criteria with regard to the Trustee in ReITs?

    (i) The trustee is registered with the Board under SEBI(Debenture Trustees) Regulations, 1993 and is not an associate of the sponsor(s) or manager; and (ii) The trustee has such wherewithal with respect to infrastructure, personnel, etc. to the satisfaction of the Board and in accordance with circulars or guidelines as may be specified by the Board; Please refer to section 4(f) of SEBI (Real Estate Investment Trusts) Regulations 2014 at link for more information

  • What are the investment conditions for ReITs?

    For the investment conditions, one may refer to Chapter V of the ReIT Regulations at the following link.

  • What is the Viability Gap Funding scheme?

    The scheme aims at supporting infrastructure projects that are economically justified but fall marginally short of financial viability. Support under this scheme is available only for infrastructure projects where private sector sponsors are selected through a process of competitive bidding. The total Viability Gap Funding under this scheme will not exceed twenty percent of the Total Project Cost; provided that the Government or statutory entity that owns the project may, if it so decides, provide additional grants out of its budget, upto a limit of a further twenty percent of the Total Project Cost. VGF under this Scheme is normally in the form of a capital grant at the stage of project construction. The detailed VGF guidelines may be accessed at link.

  • Which are the sectors eligible under VGF scheme?

    The PPP Project should be from one of the following sectors: Roads and bridges, railways, seaports, airports, inland waterways; Power; Urban transport, water supply, sewerage, solid waste management and other physical infrastructure in urban areas; Infrastructure projects in Special Economic Zones and internal infrastructure in National Investment and Manufacturing Zones; International convention centres and other tourism infrastructure projects; Capital investment in the creation of modern storage capacity including cold chains and post-harvest storage; Education, health and skill development, without annuity provision;* Oil/Gas/Liquefied Natural Gas (LNG) storage facility (includes city gas distribution network); Oil and Gas pipelines (includes city gas distribution network); Irrigation (dams, channels, embankments, etc.); Telecommunication (Fixed Network) (includes optic fibre/wire/cable networks which provide broadband/internet); Telecommunication towers; Terminal markets; Common infrastructure in agriculture markets; and Soil testing laboratories The detailed VGF guidelines may be accessed at link.

  • What is the eligibility criteria for VGF funding?

    a) The PPP projects may be posed by the Central Ministries, State Government or Statutory Authorities (like Municipal Authorities and Councils), which own the underlying assets;.
    b) To be eligible for financing under the scheme, the PPP projects should be implemented, i.e. developed, financed, constructed, maintained and operated for the Projects term by a Private Sector Company to be selected by the Government or a statutory entity through a transparent and open competitive bidding process.
    c) The criterion for bidding should be the amount of Viability Gap Funding required by the Private Sector Company for implementing the project where all other parameters are comparable.
    d) The project should provide a service against payment of pre-determined tariff or user charge.
    e) This Scheme will apply only if the contract/concession is awarded in favour of a private sector company.
    f) The approval to projects is given prior to invitation of bids and actual disbursement takes place once the private entity has expended his portion of the equity.
    g) The final VGF is determined through the bidding.

    The detailed VGF guidelines may be accessed at the following link.

  • What is the procedure for getting Viability Gap Funding?

    Project proposals may be posed by a Government or statutory entity which owns the underlying assets. The proposals shall include the requisite information necessary for satisfying the eligibility criteria specified above and be submitted in formats with annexure as specified in the guidelines.

    Please see the following link.

  • Up to what level can projects be sanctioned by Empowered Institution?

    Viability Gap Funding up to $ 1.5 million for each project may be sanctioned by the empowered Institution, subject to the budgetary ceilings indicated by the Finance Ministry.
    Empowered Institution will also consider other proposals and place them before the Empowered Committee.

    The detailed VGF guidelines may be accessed at the link.

  • What are the responsibilities of the Empowered Committee?

    Following are the responsibilities of the committee:
    a) Sanctioning Viability Gap Funding up to $ 3 million for each project subject to the budgetary ceilings indicated by the Finance Ministry. Amounts exceeding $ 30 lakhs may be sanctioned by the Empowered Committee with the approval of Finance Minister.
    b) Determining the appropriate formula that balances needs across sectors in a manner that broad bases the sectoral coverage and avoids pre-empting, of funds by a few large projects.
    c) Determining the inter-allocation between any on-going plan scheme providing viability gap funding and this Scheme.
    d) Providing clarifications or instructions relating to eligibility of a project for such support as and when requested by Empowered Institution.

    The detailed VGF guidelines may be accessed at the link.

  • What is the document checklist for proposal for grant of ‘in principle’ approval?

    a) EI memo with Annexures.
    b) Feasibility Report/Detailed Project Report.
    c) RFP Bidding Document:
    i) Vol. I Instruction of Bidders.
    ii) Vol. II Draft Concession Agreement.
    iii) Vol. III Schedules.
    d) Statement on Deviation from MCA, if any.
    e) Other project agreements as applicable.
    The above documents and soft copy thereof are to be provided in 6 sets for consideration by member of Empowered Institution

    The detailed VGF guidelines may be accessed at the link.

  • What is the document checklist for proposal for grant of final approval?

    The documents are:

    a) EI memo for final approval
    b) Appraisal Report of the project by Lead Financial Institution
    c) Executed project agreement
    d) Certificate from the Sponsoring Authority that all conditions specified in the scheme have been complied with
    The above documents and soft copy thereof are to be provided in 6 sets for consideration by member of Empowered Institution

    The detailed VGF guidelines may be accessed at the link. 

  • Is there any time lag involved between grant of in-principle approval and disbursement of grant?

    The approvals to projects are given prior to invitation of bids and actual disbursement takes place once the private entity has expanded its portion of equity. Thus, there is necessarily a time lag involved between grant of in-principle approval and disbursement of grant.
    The intervening stage involves finalisation of document, prequalification of bidders, financial bids being called, selection of bidder, financial closure and commencement of construction. In a PPP project, this process involves a minimum of 12 to 18 months.

    The detailed VGF guidelines may be accessed at the link.

  • Is VGF scheme applicable for setting up Medical Colleges?

    VGF would be admissible only if the proposed medical college is located in one of the backward districts identified under various schemes of GoI, provided there is no medical college in that district as on the date of in-principle approval of VGF by the competent authority.