Why in news?
Recently, the National Bank for Financing Infrastructure and Development (NBFID) has raised ₹10,000 crores via the maiden issuance of listed bonds.
About NBFID
- Institutions such as NBFID will be providing long-term finance for segments of the economy where the risks involved are beyond the acceptable limits of commercial banks & other ordinary financial institutions.
- They do not accept deposits from people. They source funds from the market, govt, as well as multi-lateral institution.
Functions
- Financial: To directly or indirectly lend, invest, or attract investments for infrastructure projects located entirely or partly in India.
- Developmental: Facilitating the development of the market for bonds, loans, and derivatives for infrastructure financing.
Funding
- NBFID can raise loans, both in Indian rupees and foreign currencies, or raise money by the issuance of various financial instruments.
- It can borrow money from central government, RBI, scheduled commercial banks, mutual funds, and institutions such as World Bank and Asian Development Bank.
Conclusion:-
The National Bank for Financing Infrastructure & Development (NBFID) is an important institution in the field of infrastructure and development financing. Its establishment signifies the commitment of the government to promote and support infrastructure projects in the country. NBFID serves as a dedicated financial institution that provides long-term funding, technical assistance, and expertise for infrastructure development.
By focusing on infrastructure financing, NBFID aims to address the critical gaps in infrastructure development, which are vital for economic growth, job creation, and overall socio-economic progress. The bank plays a crucial role in mobilizing resources, attracting investments, and facilitating the implementation of infrastructure projects across various sectors such as transportation, energy, water, and urban development.
Read also:- Infrastructure Investments
