Daily News Analysis

National Bank for Financing Infrastructure and Development (NaBFID)

24th November, 2021 Economy

Figure 2: No Copyright Infringement Intended

Context:

  • The National Bank for Financing Infrastructure and Development (NaBFID) is likely to begin its lending operations with about 190-200 big infrastructure projects in the railways, roads and energy sector.

Details:

  • There are 193 projects above Rs 1,000 crore each which are there under the National Infrastructure Pipeline (NIP).
  • the development finance institution will also look into other roles that it could play for the government.

 

About National Bank for Financing Infrastructure and Development

  • In March this year, the Parliament had passed a bill to set up NaBFID, a development financial institution (DFI).
  • K V Kamath has been appointed by the government to head the National Bank for Financing Infrastructure and Development (NaBFID).
  • NaBFID has been set up to boost infrastructure financing in the country like development of bonds and derivatives markets needed for infrastructure financing.

Functions of NaBFID:

  • extending loans and advances for infrastructure projects,
  • taking over or refinancing such existing loans,
  • attracting investment from private sector investors and institutional investors for infrastructure projects,
  • organising and facilitating foreign participation in infrastructure projects,
  • facilitating negotiations with various government authorities for dispute resolution in the field of infrastructure financing,
  • providing consultancy services in infrastructure financing.  

 

Source of Funds:

NBFID may borrow money from:

  • central government,
  • Reserve Bank of India (RBI),
  • scheduled commercial banks,
  • mutual funds,
  • multilateral institutions such as World Bank and Asian Development Bank.

Prior sanction for investigation and prosecution: 

No investigation can be initiated against employees of NBFID without the prior sanction of:

  • the central government in case of the chairperson or other directors,
  • (ii) the managing director in case of other employees.