ICICI Bank Ltd., Bank of Baroda, Citigroup Inc. and Life Insurance Corp. of India have signed an agreement to create a $2 billion infrastructure debt fund to support lending to roads, ports and other infrastructure projects, according to a Dow Jones report. This is the first debt fund in India that will invest in such public-private partnership projects, according to the fund sponsors.
The group will form a non-banking finance company to manage the fund, with an equity capital base of Rs 3 billion ($60.6 million), according to ICICI Bank CEO Chanda Kochhar. The group will then sell bonds to raise $2 billion, says M.D. Mallya, chairman and managing director of Bank of Baroda.
India finance minister Pranab Mukherjee says that the withholding tax on interest payments