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With reference to the National Bank for Financing Infrastructure and Development, consider the following statements:
- It is a specialized Development Finance Institution in India.
- Itis regulated and supervised by the Union Ministry of Finance.
Which of the statements given above is/are correct?
- a)1 Only
- b)2 Only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
With reference to the National Bank for Financing Infrastructure and D...
The correct answer is option 'A' - 1 Only.
National Bank for Financing Infrastructure and Development (NaBFID) is a specialized Development Finance Institution (DFI) in India. It was established in 2021 as a statutory body under the National Bank for Financing Infrastructure and Development Act, 2021.
Explanation:
Specialized Development Finance Institution:
NaBFID is a specialized DFI, which means it is primarily focused on providing long-term financing for infrastructure projects in the country. DFIs play a crucial role in funding and promoting infrastructure development as they have the expertise and resources to provide long-term financing for such projects.
Regulation and Supervision:
NaBFID is regulated and supervised by the Union Ministry of Finance. This means that the Ministry of Finance is responsible for overseeing the functioning of the bank and ensuring that it operates in accordance with the relevant laws and regulations. The Ministry may also provide guidance and directions to the bank from time to time.
Importance of NaBFID:
The establishment of NaBFID is a significant step towards meeting the financing needs of infrastructure projects in India. Infrastructure development is crucial for economic growth and improving the quality of life for citizens. However, financing these projects can be challenging due to their long gestation periods, high capital requirements, and associated risks. DFIs like NaBFID help bridge this gap by providing long-term financing at competitive rates, thereby attracting private investments and supporting the development of infrastructure in the country.
Conclusion:
In conclusion, the National Bank for Financing Infrastructure and Development (NaBFID) is a specialized Development Finance Institution in India. It is regulated and supervised by the Union Ministry of Finance. The establishment of NaBFID is expected to play a crucial role in financing infrastructure projects and promoting economic growth in the country. Therefore, statement 1 is correct, while statement 2 is incorrect.
National Bank for Financing Infrastructure and Development (NaBFID) is a specialized Development Finance Institution (DFI) in India. It was established in 2021 as a statutory body under the National Bank for Financing Infrastructure and Development Act, 2021.
Explanation:
Specialized Development Finance Institution:
NaBFID is a specialized DFI, which means it is primarily focused on providing long-term financing for infrastructure projects in the country. DFIs play a crucial role in funding and promoting infrastructure development as they have the expertise and resources to provide long-term financing for such projects.
Regulation and Supervision:
NaBFID is regulated and supervised by the Union Ministry of Finance. This means that the Ministry of Finance is responsible for overseeing the functioning of the bank and ensuring that it operates in accordance with the relevant laws and regulations. The Ministry may also provide guidance and directions to the bank from time to time.
Importance of NaBFID:
The establishment of NaBFID is a significant step towards meeting the financing needs of infrastructure projects in India. Infrastructure development is crucial for economic growth and improving the quality of life for citizens. However, financing these projects can be challenging due to their long gestation periods, high capital requirements, and associated risks. DFIs like NaBFID help bridge this gap by providing long-term financing at competitive rates, thereby attracting private investments and supporting the development of infrastructure in the country.
Conclusion:
In conclusion, the National Bank for Financing Infrastructure and Development (NaBFID) is a specialized Development Finance Institution in India. It is regulated and supervised by the Union Ministry of Finance. The establishment of NaBFID is expected to play a crucial role in financing infrastructure projects and promoting economic growth in the country. Therefore, statement 1 is correct, while statement 2 is incorrect.
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With reference to the National Bank for Financing Infrastructure and D...
Recently, the National Bank for Financing Infrastructure and Development (NaBFID) has raised ₹10,000 crores via the maiden issuance of listed bonds.
- It was set up in 2021, by an Act of the Parliament (The National Bank for Financing Infrastructure and Development Act, 2021).
- It is a specialized Development Finance Institution in India.
- Objectives: Addressing the gaps in long-term non-recourse finance for infrastructure development, strengthening the development of bonds and derivatives markets in India, and sustainably boosting the country’s economy.
- It shall be regulated and supervised by RBI as an All India Financial Institution (AIFI)
What is a Development Finance Institution (DFI)?
- These are organizations owned by the government or public institutions to provide funds for infrastructure and large-scale projects, where it often becomes unviable for large banks to lend.
- They provide two types of funds- Medium (1-5 years) and Large (< 5 years).
Hence only statement 1 is correct.
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With reference to the National Bank for Financing Infrastructure and Development, consider the following statements: It is a specialized Development Finance Institution in India. Itis regulated and supervised by the Union Ministry of Finance.Which of the statements given above is/are correct?a)1 Onlyb)2 Onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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