The National Bank for Financing Infrastructure and Development (NaBFID) will begin business by approving the first loan for the project in the first quarter of the new financial year (2022-23) beginning April 2022, said its chairman on Friday.
The vision is to see lending of Rs 3-4 trillion by the institution in next three years or so. The emphasis in funding will be on having the right tenor (loan period) and right price, said K V Kamath, chairman, NaBFID. The first approval would probably be in the first quarter of the next accounting year (FY23). Bank will need that much time to get chief executive and key staff on board. It is not appropriate for us to run this without that componence, added Kamath while virtually addressing the annual general meeting of Federation of Indian Chambers of Commerce and Industry (FICCI).
The DFI would have a chairman, two government nominees, and four whole-time directors. Whole-time directors will include a chief executive officer (CEO) and three other members.
Kamath said the new infra bank had got policies and framework ready in record time of 30 working days and was now working in technology identification. Many banks are helping create building blocks for the new organisation. For now, the new entity will work out of space at SIDBI House in Mumbai’s Bandra-Kurla Complex.
As for raising funds, the development finance institution will tap funds from domestic and global markets as well as approach multilateral institutions. In tapping markets, it will look at insurance and pension fund ecosystem, a vibrant space growing at rapid pace, he said.
The DFI will be set up with an initial paid-up capital of Rs 20,000 crore so that it can leverage around Rs 3 trillion from the markets in a few years to provide long-term funds to infrastructure projects as well as for development needs of the country. The government will give Rs 5,000 crore as grant to the institution in the form of reimbursement on taxes paid on the bonds issued by the institution.