Source- This post on the National Bank for Financing Infrastructure and Development (NaBFID) has been created based on the article “National Bank for Financing Infrastructure and Development (NaBFID)” published on “Mint” on 19 July 2024.
Why in the news?
The government wants to increase the capital base of the National Bank for Financing Infrastructure and Development, or NaBFID, to 1 trillion through support from banks.
About National Bank for Financing Infrastructure and Development (NaBFID)
| Aspects | Description |
| About | 1. It was set up in 2021 under the National Bank for Financing Infrastructure and Development Act, 2021. 2. It is a development Finance Institution in India which focuses on long-term infrastructure financing. 3.It is regulated and supervised by the Reserve Bank of India (RBI) as an All-India Financial Institution (AIFI). |
| Objective | Its capital base should be increased to 1 trillion INR with support from banks. |
| Purpose | To provide specialized financing for infrastructure development in India. |
| Goals | 1) Addressing gaps in long-term non-recourse finance for infrastructure. 2) Strengthening the development of bonds and derivatives markets in India. 3) Boosting the country’s economy sustainably. |
About Development Finance Institutions (DFIs):
1. It is an organization owned by the government or public institutions to fund infrastructure and large-scale projects.
2. They step in where it is often unviable for large banks to lend due to project scale and long-term nature.
3. Types of Funds Provided: They provide medium-Term funds including financing for 1-5 years and Long-Term funds including financing for more than 5 years.
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