Recently, the National Bank for Financing Infrastructure and Development (NaBFID) has raised ₹10,000 crores via the maiden issuance of listed bonds.
- It was set up in 2021, by an Act of the Parliament (The National Bank for Financing Infrastructure and Development Act, 2021).
- It is a specialized Development Finance Institution in India.
- Objectives: Addressing the gaps in long-term non-recourse finance for infrastructure development, strengthening the development of bonds and derivatives markets in India, and sustainably boosting the country’s economy.
- It shall be regulated and supervised by RBI as an All India Financial Institution (AIFI)
What is a Development Finance Institution (DFI)?
- These are organizations owned by the government or public institutions to provide funds for infrastructure and large-scale projects, where it often becomes unviable for large banks to lend.
- They provide two types of funds- Medium (1-5 years) and Large (< 5 years).
Q1) What is the role of the Reserve Bank of India?
The Reserve Bank of India (RBI) plays a crucial role in India's financial system and economy. As the central bank of the country, its primary objective is to maintain price stability and ensure the stability and soundness of the banking system.