Thiruvananthapuram: Even as the Kerala Infrastructure Investment Board (KIIFB) has been slammed by the Comptroller and Auditor General (CAG) for raising funds overseas violating norms, this special purpose investment vehicle of the state government has sought Reserve Bank of India's permission for availing Rs 1100 crore loan from the International Finance Corporation (IFC).
The latest overseas bid of KIIFB is for issuing green bonds to raise money for environment-friendly projects. Such bonds have a low-interest rate and long duration for repayment.
The KIIFB board meeting held on June 30 had given the go-ahead for the proposal.
However, it is not clear whether the RBI will take a prompt decision on KIIFB request in the wake of the controversy brewing over masala bonds. But KIIFB officials are hopeful of a positive response as they say RBI cannot legally deny permission to its request.
As reported earlier, Kerala Finance Minister Thomas Isaac had lashed out at the CAG for its observation in its draft report that KIIFB was raising loans "unconstitutionally. In defence, he argued that even corporate bodies of the central government have also availed such loans.
"The state government requires the permission of the centre for taking loans. But in this case, it's a corporate body that is taking the loan and not the state government, the minister said, as the row over the CAG report hit headlines recently.
The IFC provides financial assistance to help developing countries achieve sustainable growth in the private sector. The repayment of the loan can be done over a period of 30 years.
Masala bonds are bonds issued outside India but denominated in Indian Rupees. The term was used by the IFC to connote India's fame as the land of spices which is popularly referred to as 'masala' in the country.