State-run IDBI Bank will launch the country's first infrastructure debt fund (IDF) to raise $5 billion for building roads, ports and airports. Such debt funds, announced in the budget 2011-12, can be floated through non-banking finance companies (NBFC) or as trusts. They were proposed two years ago by a panel led by HDFC chairman Deepak Parekh, which had suggested an initial corpus of . 50,000 crore.

IDBI Bank has sought Reserve Bank of India's approval for an NBFC, which will have a capital base of . 1,000 crore. The bank will hold 30% stake in the NBFC and the rest will be held by some state-run banks and LIC, said a top banker involved in the process. The new entity under the relaxed norms can provide longterm debt of over . 25,000 crore in the infrastructure sector. IDBI Bank CMD RM Malla declined to comment.

According to current guidelines, IDFs can raise funds from investors, primarily domestic and offshore insurance and pension funds, trusted sources for long-term finance. The fund established under a trust will be a mutual fund that will issue units and will be regulated by Sebi while a company-based fund will be a non-banking finance company that will issue bonds and will be regulated by the RBI.