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Cabinet gives nod to Bill for setting up DFI

Topics Covered: Infrastructure.

Cabinet gives nod to Bill for setting up DFI:


The Union Cabinet has approved a Bill to set up a Development Finance Institution – National Bank for Financing Infrastructure and Development (NaBFID).


The government had mentioned in the Budget that it would be setting up a national bank for funding infrastructure and development activity.

Key facts:

  • NaBFID will be set up with a corpus of ₹20,000 crore and an initial grant of ₹5,000 crore from the government.
  • Initially, it will be wholly owned by the Government but the Government stake will be lowered to a quarter.
  • It will also enjoy some tax benefits for an initial 10-year period and some amendments will be carried out in the Indian Stamp Act in this regard.
  • It will have a professional board and at least 50% of members will be non-official directors.
  • An eminent person will be appointed chairperson.

Need for:

  • To mobilise the ₹111 lakh crore required for funding of the ambitious national infrastructure pipeline.
  • To enhance credit rating of projects. It would fund projects where others are not willing to enter because of the risks involved.


Prelims Link:

  1. About NaBFID.
  2. What is NIP? When was it launched?
  3. Projects covered under NIP.
  4. Key recommendations made by task force headed by Atanu Chakraborty on NIP.
  5. Three committees proposed to be set up as per the recommendations made by Task Force.
  6. What is India Investment Grid?

Mains Link:

Discuss the significance and features of NIP.

Sources: the Hindu.