The Central Government has notified the National Bank for Financing Infrastructure and Development (NaBFID) as a Public Financial Institution (PFI) under the Companies Act, 2013.
About National Bank for Financing Infrastructure and Development (NaBFID):
- NaBFID was established in 2021 under the National Bank for Financing Infrastructure and Development Act, 2021.
- It was created to focus on long-term infrastructure financing in India, including the development of bonds and derivatives markets.
- Being a PFI means NaBFID can now enhance its capacity to fund large-scale infrastructure projects, further strengthening India’s national infrastructure finance system.
- Only institutions established under any Central or State Act, or those with at least 51% paid-up share capital held by the central or state government, can be notified as PFIs.
Recent Developments and Impact
- In consultation with the Reserve Bank of India (RBI), the Government of India officially recognized NaBFID as a PFI under the Companies Act, 2013.
- This act governs the incorporation, responsibilities, and dissolution of companies in India.
- As of February 2024, NaBFID has sanctioned over Rs 86,804 crore for infrastructure projects across the country.
- 50% of these sanctions have long tenures ranging from 20 to 50 years.
- NaBFID aims to sanction over Rs 3 lakh crore by March 2026 to further boost infrastructure financing.
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Frequently Asked Question:
What is NaBFID and when was it established?
NaBFID, or the National Bank for Financing Infrastructure and Development, was established in 2021 to focus on long-term infrastructure financing in India.
What are the benefits of recognizing an institution as a Public Financial Institution (PFI)?
Recognizing an institution as a PFI enhances its capacity to fund large-scale projects and strengthens the national finance system.
What is NaBFID’s target for infrastructure financing by March 2026?
NaBFID aims to sanction over Rs 3 lakh crore by March 2026 to boost infrastructure financing.