Take out financing scheme aims to purchase infrastructure loans given by the commercial banks from their book by specially created infrastructure lending institutions. Hence, the commercial banks need not hold such loans as they have long gestation periods.
Take out financing scheme means a long-term lending institution in the infrastructure sector like the IIFCL is purchasing the infrastructure loan sanction given by a commercial bank from its book. This will relieve the commercial bank from locking assets in a long-term manner. Takeout financing offers a window to the banks to free their balance sheet from exposure to infrastructure loans, lend to new projects and also enable better management of the asset liability position. In other words, takeout financing enables financing longer term projects with medium-term funds.
