Last month, the government appointed veteran banker KV Kamath as the chairman of the National Bank for Financing Infrastructure and Development (NABFID) for three years.
According to sources, the Finance Ministry will soon inform the Banks Board Bureau (BBB) ​​about the appointment of MD and DMD of NABFID.
Sources said that the bureau will release the advertisement and start the selection process.
The BBB is the headhunter for state-owned banks and financial institutions.
MD, DMD and whole time director shall not hold office after attaining the age of 65 years and 62 years respectively.
As per the National Bank for Financing Infrastructure and Development (NABFID) Act 2021, the institution shall have one MD and not more than three DMDs.
The government has given a grant of Rs 5,000 crore in addition to an equity capital of Rs 20,000 crore.
The central government will provide grants till the end of the first financial year. The government will also provide guarantees for borrowings from multilateral institutions, sovereign wealth funds and other foreign funds at a concessional rate of up to 0.1 per cent.
Development Finance Institutions (DFIs) have been set up as a statutory body to address market failures that stem from long term, low margin and risky nature. infrastructure financing.
Therefore, DeFi has both developmental and financial objectives. Firstly, the institution will be 100 percent government owned.
It will help fund around 7,000 infra projects under the National Infrastructure Pipeline (NIP), which envisages an investment of Rs 111 lakh crore by 2024-25.
The DFI will remain out of the purview of the CAG, CVC and CBI, with the aim of enabling faster decision making.
The government expects that DFIs will use this fund to raise up to Rs 3 lakh crore in the next few years.
During the pre-liberalized era, there were DFIs in India that were mainly engaged in the development of the industry.
ICICI and IDBI, in their previous incarnations, were DFIs. Even the country’s oldest financial institution IFCI Limited functioned as a DFI.
In India, the first DFI was commissioned in 1948 with the establishment of
Corporation of India (IFCI).
Subsequently, the Industrial Credit and Investment Corporation of India (ICICI) was established in 1955 with the support of the World Bank.
industrial development
(IDBI) came into existence in 1964 to promote infrastructure projects and long-term financing for industry.