Government invests Rs 20,000 crore in NaBFID

The Centre has pumped in Rs 20,000 crore in National Bank for Financing Infrastructure and Development (NaBFID) that will assist the development finance institution to begin its work to catalyse investment in the infrastructure sector.

In a notification, the Department of Financial Services (DFS) declared February 7 as the date on which Rs 20,000 crore of the share capital of the NaBFID has been assigned to the Centre.The DFI had to be installed with an initial paid-up capital of Rs 20,000 crore.

Separately, the Banks Board Bureau (BBB) has additionally sought applications for the position of managing director of the government-owned development finance institute.The DFI is preparing to begin its work in the April-June quarter.

The DFI will lend to or infuse in infrastructure projects situated in India and outside the nation prioritising systemic risk mitigation, credit enhancement, subordinate debt, debt maturities suited to project life spans, and boost long-term finance for the same.The DFI will obtain government guarantees at a concessional rate of up to 0.1% for borrowing from multilateral institutions, sovereign wealth funds, and other such foreign institutions.

In October 2021, the government had selected veteran banker KV Kamath as chairperson of the DFI. Government nominees Pankaj Jain and Sumita Dawra were also nominated as directors on the board of NaBFID.

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Also read: K V Kamath appointed as Chairman of NaBFID