CSR Activity

CSR Activity

Srei - A Public Financial Institution

The Ministry of Corporate Affairs, through its notification dated September 26, 2011, published in the Official Gazette of India notified Srei, as a Public Financial Institution under Section 4A of the Act. As a result of the PFI status, Srei is required to undertake certain continuing compliances such as the main business of our Company should be industrial / infrastructural financing, the financial statement should show that its income from industrial/ infrastructural financing exceeds 50% of its income; and the net-worth of our Company should be at least Rs. 10,000 million.

Being a PFI, Srei benefits from section 36(1) (vii c) of the Income Tax Act, which permits a PFI to include doubtful debts as an eligible deduction under the Income Tax Act. Consequently, the operations of Srei are subject to relatively low tax liabilities.

Criteria for obtaining PFI status

The Ministry of Corporate Affairs (MCA) issued ‘PFI Guidelines’ on June 2, 2011, for granting the Public Finance Institution (PFI) status to a financial institution under Section 4A of the Companies Act.

A financial institution has to comply with the following requirements to obtain a PFI status:-

  • A company or corporation should be established under a special act or the Companies Act, being Central Act;
  • The main business of the company should be industrial/infrastructural financing;
  • The company must be in existence for at least three years and its financial statement should show that its income from industrial/ infrastructural financing exceeds 50% of its income;
  • The net-worth of the company should be Rs. 10,000 million;
  • The company should be registered as an Infrastructure Finance Company (IFC) with the RBI or as a Housing Finance Company (HFC) with the National Housing Bank;