Canara Bank signs MoU with HRD Ministry to start higher education financing agency
Canara Bank has signed a memorandum of understanding with the Ministry of Human Resource Development (MHRD) to operationalise the Higher Education Financing Agency (HEFA).
In September 2016, the Union Cabinet had approved the establishment of HEFA to give a major push for the creation of high quality infrastructure/capital assets in premier educational institutions.
HEFA has been jointly promoted by the Ministry of Human Resource Development (MHRD) and Canara Bank with an authorised capital of Rs. 2,000 crore..
HEFA has been formed as a special purpose vehicle.
It would leverage the equity to raise up to Rs. 20,000 crore for funding projects for infrastructure and development of world class Labs in IITs/IIMs/NITs and such other institutions.
HEFA would also mobilise CSR funds from PSUs/corporates, which would in turn be released for promoting research and innovation in these institutions on a grant basis.
The principal portion of the loan will be repaid through ‘internal accruals’ (earned through fee receipts, research earnings etc.,) of the institutions.
The Government would service the interest portion through regular Plan assistance.
All the centrally funded higher educational institutions would be eligible for joining as members of HEFA.
For joining as members, the institution should agree to escrow a specific amount from their internal accruals to HEFA for a period of 10 years.