Mumbai: Former Reserve Bank of India governor Raghuram Rajan is teaming up with a bunch of corporate donors, including the Mahindras, the Seshasayee group and the Jindals, to establish a liberal arts university at Sri City in Andhra Pradesh.

Krea University is likely to be set up with an initial investment of Rs 750 crore, which is expected to come out of the corporate social responsibility (CSR) corpus of funds that companies are statutorily required to set aside every year.

While former banker N. Vaghul is the chairman of the university's governing council, noted academic Sunder Ramaswamy has been named the vice-chancellor.

The governing council of Krea University will include Sajjan Jindal, Anand Mahindra, Kiran Mazumdar Shaw, former TCS chief S. Ramadorai, Cyril Shroff, managing partner of solicitor firm Cyril Amarchand Mangaldas, Thermax group owner Anu Aga, private equity investor Srinivasa Raju, Princeton university professor of mathematics Manjul Bhargava and Stanford University provost John Etchemendy, who had stepped down from Infosys board in the wake of Vishal Sikka's controversial exit last year.

The first batch will commence in July 2019. Admissions will start this November. The fees will range between Rs 7 and 8 lakh, inclusive of hostel facilities.

The university will initially run courses from the IFMR campus in Sri Coty, and eventually shift to its own 200-acre campus which will be ready by 2020.

It will offer a four-year residential undergraduate programme in liberal arts and sciences leading to BA (Honours) and BSc (Honours) degrees, for which the permission from UGC has been sought, said R. Seshasayee, chairman of IndusInd Bank and the chairman of the supervisory board of the university.

Under the Companies Act 2013, companies with a net worth of over Rs 500 crore, turnover of over Rs 1,000 crore, or net profit of more than Rs 5 crore to spend at least 2 per cent of the average net profit in the immediate three preceding years on CSR activity.

Rajan, who is currently Professor of Finance at University of Chicago, Booth School of Business, returned to academia after stepping down as RBI governor in September 2016 at the end of a three-year tenure which the Modi government had refused to extend.

Rajan, who will be an adviser to the university's governing council, said: "What we're trying to do is to create a new generation of thinking Indians who will contribute to the development of the globe."

"We intend to bring something to the table that simply doesn't exist in our country today, but is very much warranted for our future," he added.

Sajjan Jindal of the JSW Group, another governing council member, expressed the hope that the university would bring great global and Indian minds together to create an institution of global prominence.

Anand Mahindra, a member of the governing council, said: "Krea's graduates will undoubtedly be the most sought after candidates, both in the corporate world and in other chosen vocations."

Rajan had first spoken about his desire to create a new liberal arts university last September when he came to India to promote his book I do What I do - a collection of his speeches during his stint at Mint Street interspersed with some commentary that provided background to the decisions of the central bank at that time.

"India has a lot of engineering colleges, but we need more universities like Ashoka," Rajan had said in an interview at that time.

Rajan, who has visited India several times over the past few years, had said he was spending a lot of time to build a liberal arts university. "I am very excited about the possibility," he had said.