National Bank for Financing Infrastructure and Development (NaBFID)
26-08-2023
01:07 PM
1 min read
Overview:
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:
- 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.
- Regulated by: It shall be regulated and supervised by RBI as an All-India Financial Institution (AIFI).
- The principal idea behind the setup of NaBFID is to provide a dedicated and specialized institution focused on addressing the long-term financing needs of the infrastructure sector in India.
What is Development Finance Institution?
- 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 RBI?
The Reserve Bank of India, abbreviated as RBI, is India's central bank and regulatory body responsible for regulation of the Indian banking system. It is responsible for the control, issue and maintaining supply of the Indian rupee. The RBI was established in 1934, under the Reserve Bank of India Act.
Source: Govt wants its big banks to help their rival-the country’s youngest infra lender