India's central bank will allow banks and financial companies to set up infrastructure debt funds to attract investments into building roads, ports and power plants in Asia's third-largest economy.
Banks and finance companies with a minimum net worth of Rs3 billion (Dh223.3 million) will be eligible to set up infrastructure debt plans as mutual funds, the Reserve Bank of India said in an emailed statement.
India, which the World Economic Forum ranks below war-ravaged Ivory Coast for the quality of its infrastructure, wants to double spending on public work projects to $1 trillion (Dh3.67 trillion) in the five years to 2017.
The South Asian nation is losing about 2.5 percentage points in growth a year from regulations and approval requirements that deter investment in roads, ports and power generation, Credit Suisse Group AG estimates.
Banks setting up such funds would have to adhere to existing rules including limits on their investments in financial services companies, and in equities and bonds.
The finance minister in his budget speech for the current fiscal year had announced the setting up of infrastructure debt funds.