The National Bank for Financing Infrastructure and Development (NBFID) is likely to start its lending operations with about 190-200 big infrastructure projects in the railways, roads and energy sector
• This announcement was made by K V Kamath who was recently appointed Chairman of NBFID by the Central government.
• The newly set up NBFID was established with a view to catalysing investment in fund-starved infrastructure sector in India.
• According to K V Kamath, under the National Infrastructure Pipeline (NIP), there are 193 projects above Rs 1,000 crore each.
• NIP with an ambition of USD 1.5 trillion covers key sectors like roads, metro, railways, and energy. It also includes some social projects like irrigation projects.
NBFID was set up as a corporate body, with an authorised share capital of one lakh crore rupees. It was set up with following objectives:
- To directly or indirectly lend, attract investment or invest for infrastructure projects that are located entirely or partly in India.
- To facilitate the development of market for loans, bonds, and derivatives for infrastructure financing.
Functions of NBFID
Main functions of NBFID are:
- To extend loans and advances for infrastructure projects.
- To take over or refinance such existing loans.
- To attract investment from private sector investors as well as institutional investors for infrastructure projects.
- To organise and facilitate foreign participation in infrastructure projects.
- To facilitate negotiations with several government authorities for dispute resolution with respect to infrastructure financing.
- To provide consultancy services in infrastructure financing.
How NBFID raises fund?
NBFID raises money in the form of loans or otherwise in Indian rupees and foreign currencies. It also raises money by issuing or selling financial instruments like bonds and debentures. It can also borrow money from central government, Reserve Bank of India, mutual funds, scheduled commercial banks besides multilateral institutions like Asian Development Bank and World Bank.