NABFID (Syllabus: GS Paper 3 – Economy)
Context: 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.
National Bank for Financing Infrastructure and Development (NaBFID)
- Established in: NaBFID was founded by The National Bank for Financing Infrastructure and Development Act, 2021.
- Objective: Focuses on filling gaps in long-term non-recourse finance for infrastructure.
oStrengthening Bond Markets: Aims to bolster the development of bonds and derivatives markets in India.
- Boosting the Economy: Intends to sustainably enhance the country’s economy.
- Mission: To be the leading enabler for infrastructure financing with a focus on innovation, environmental sustainability, and overall sustainability.
- Vision: To achieve global recognition as a strong impact investor, driving transformative infrastructure funding in India.
- Funding: NaBFID may borrow money from: (i) central government, (ii) Reserve Bank of India (RBI), (iii) scheduled commercial banks, (iii) mutual funds, and (iv) multilateral institutions such as World Bank and Asian Development Bank.
- Functions:
oFinancial Objectives: Includes lending, investing, or attracting investments for infrastructure projects within or partially in India.
oDevelopmental Objectives: Focuses on developing markets for bonds, loans, and derivatives for infrastructure.
oLoan and Advance Extensions: Provides loans and advances for infrastructure projects.
oRefinancing Existing Loans: Takes over or refinances existing infrastructure loans.
oAttracting Investments: Seeks investments from both private and institutional investors.
oFacilitating Foreign Participation: Organizes and promotes foreign involvement in infrastructure projects.
oDispute Resolution: Assists in negotiations with government authorities to resolve disputes in infrastructure financing.
