Rule 288 - Infrastructure debt fund Operative rule

Infrastructure Debt Fund setup procedure. 288. (1) An Infrastructure Debt Fund must be set up as a Non-Banking Financial Company conforming to the Reserve Bank of India's regulatory framework. (2) Its funds may be invested only in post-commencement-operation infrastructure projects with at least one year of satisfactory commercial operation, or as a direct lender in toll-operate-transfer projects. (3) Funds may be raised by: issuing rupee- or foreign-currency-denominated bonds (per RBI directions and FEMA regulations, with a minimum 5-year original maturity for non-resident investors); issuing zero-coupon bonds (per rule 7, with the same 5-year non-resident maturity condition); or external commercial borrowings (per RBI Foreign Exchange Department directions, minimum 5-year tenor, not sourced from Indian banks' foreign branches). (4) Investment in any individual project or group-affiliated project shall not exceed 20% of the fund's corpus. (5) No investment may be made in a project where the fund's specified shareholder, or an associated enterprise or group of that shareholder, has a substantial interest. (6) The fund shall file its return of income under section 263(1)(a) by the section 263(1)(c) due date. (7) Failure to meet this rule's conditions or RBI directions results in the fund losing its Infrastructure Debt Fund treatment under Schedule VII [Table: Sl. No. 46] for all purposes of the Act. (8) This rule defines "associated enterprise" (per section 162), "concern" (per section 2(40)), "corpus," "group" (per SEBI Mutual Fund Regulations, 1996), "substantial interest" (10% voting-power beneficial ownership in a company, or 20% income entitlement in another concern), "relative" (a detailed family-relationship list), and "specified shareholder" (a 30%-or-more voting-power holder).