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Last Updated On: 09-04-2011

Why does the MoR need a financing arm?

As per the government policy, no ministry other than the ministry of finance can raise money directly or indirectly in the financial market. Hence, IRFC acts as a financing arm of the MoR to meet its extra budgetary resources.


Borrowing through a separate legal entity such as IRFC also enables the Gol to limit its net borrowings because the debt taken by a separate legal entity is not consolidated with its own debt.