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The Rajya Sabha has taken up a bill that seeks to set up a statutory institution to be called National Bank for Financing Infrastructure and Development. The Institution will act as the principal Development Financial Institution and development bank for infrastructure financing in the country.
The National Bank for Financing Infrastructure and Development (NBFID) Bill, 2021 has been passed by the Lok Sabha on Tuesday. The new Development Finance Institution (DFI) will seek to address market failures that stem from the long-term, low margin and risky nature of infrastructure financing. It shall be wholly owned by the central government to begin with in order to foster confidence on its stability and sustainability and to raise resources at competitive rates.
The Government will provide the institution with grants and contributions, guarantees at concessional rates for foreign borrowings and any other concessions. The Union Cabinet had last week approved the setting up of a DFI with a capital infusion of 20 thousand crore rupees.
