NATIONAL BANK FOR FINANCIAL INFRASTRUCTURE & DEVELOPMENT

NATIONAL BANK FOR FINANCIAL INFRASTRUCTURE & DEVELOPMENT

Subject : National organisations / Legislations

Context : Parliament passes bill to set up National Bank for Financing Infrastructure and Development.

Concept :

• The NaBFID Bill, 2021 was introduced in Lok Sabha on March 22, 2021.
• The Bill seeks to establish the National Bank for Financing Infrastructure and Development (NBFID) as the principal development financial institution (DFIs) for infrastructure financing.

What are DFIs?

• DFIs are set up for providing long-term finance for such segments of the economy where the risks involved are beyond the acceptable limits of commercial banks and other ordinary financial institutions.
• Unlike banks, DFIs do not accept deposits from people.
• They source funds from the market, government, as well as multi-lateral institutions, and are often supported through government guarantees.