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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.
- It is 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', i.e., only statement 1 is correct.
Explanation:
The National Bank for Financing Infrastructure and Development (NaBFID) is a proposed specialized Development Finance Institution (DFI) in India. However, as of now, it has not been established. Therefore, statement 1 is correct.
Statement 2, on the other hand, is incorrect. The NaBFID is not regulated and supervised by the Union Ministry of Finance. The proposed legislation for the establishment of NaBFID specifies that it will be regulated by the Reserve Bank of India (RBI). The RBI is the central bank of India and is responsible for the regulation and supervision of financial institutions in the country.
NaBFID is being set up with the objective of financing infrastructure projects in India. It aims to fill the existing infrastructure financing gap and provide long-term funding for infrastructure development in the country. The proposed institution will have an authorized capital of Rs. 1 lakh crore and will be able to raise funds from various sources, including the government, multilateral institutions, and the domestic and international capital markets.
Once established, NaBFID will be responsible for providing financial assistance, including debt and equity, to infrastructure projects. It will also undertake activities such as project development, advisory services, and credit enhancement to support infrastructure development in the country.
The establishment of NaBFID is seen as a significant step towards addressing the funding requirements of infrastructure projects in India. The lack of long-term financing options has been a major challenge for infrastructure development in the country. NaBFID is expected to play a crucial role in mobilizing funds and facilitating the implementation of infrastructure projects across various sectors, including transportation, energy, water, and urban infrastructure.
In conclusion, the National Bank for Financing Infrastructure and Development is a proposed specialized Development Finance Institution in India. It will be regulated by the Reserve Bank of India and will play a crucial role in financing infrastructure projects in the country.
Explanation:
The National Bank for Financing Infrastructure and Development (NaBFID) is a proposed specialized Development Finance Institution (DFI) in India. However, as of now, it has not been established. Therefore, statement 1 is correct.
Statement 2, on the other hand, is incorrect. The NaBFID is not regulated and supervised by the Union Ministry of Finance. The proposed legislation for the establishment of NaBFID specifies that it will be regulated by the Reserve Bank of India (RBI). The RBI is the central bank of India and is responsible for the regulation and supervision of financial institutions in the country.
NaBFID is being set up with the objective of financing infrastructure projects in India. It aims to fill the existing infrastructure financing gap and provide long-term funding for infrastructure development in the country. The proposed institution will have an authorized capital of Rs. 1 lakh crore and will be able to raise funds from various sources, including the government, multilateral institutions, and the domestic and international capital markets.
Once established, NaBFID will be responsible for providing financial assistance, including debt and equity, to infrastructure projects. It will also undertake activities such as project development, advisory services, and credit enhancement to support infrastructure development in the country.
The establishment of NaBFID is seen as a significant step towards addressing the funding requirements of infrastructure projects in India. The lack of long-term financing options has been a major challenge for infrastructure development in the country. NaBFID is expected to play a crucial role in mobilizing funds and facilitating the implementation of infrastructure projects across various sectors, including transportation, energy, water, and urban infrastructure.
In conclusion, the National Bank for Financing Infrastructure and Development is a proposed specialized Development Finance Institution in India. It will be regulated by the Reserve Bank of India and will play a crucial role in financing infrastructure projects in the country.
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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. It is 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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