Lok Sabha passes bill to create National Bank for Financing Infrastructure and Development

The Lok Sabha on Tuesday passed a bill that seeks to set up a statutory institution to be called National Bank for Financing Infrastructure and Development as the principal DFI and development bank for infrastructure financing.

The National Bank for Financing Infrastructure and Development (NBFID) Bill, 2021 was passed after a reply by Finance Minister Nirmala Sitharaman.

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 Rs 20,000 crore.

( With inputs from ANI )