National Bank for Financing Infrastructure and Development Bill, Rajya Sabha, and Lok Sabha have passed the Bill.
New Delhi: National Bank for Financing Infrastructure and Development Bill, 2021 has got Parliament’s nod after Rajya Sabha on Thursday passed it by voice vote.
The Lok Sabha has already passed the Bill.
The Bill provides for the setting up of a National Infrastructure Finance Development Bank, which would provide funding for long-term infrastructure projects.
Replying to the debate, the Finance Minister Nirmala Sitharaman said in the Upper House that for the operation of the bank aboard will be constituted which in turn, will appoint a Managing Director and Deputy Managing Director.
“The bank would be Rs one lakh crore of equity which will be shared by the Government and other stakeholders. Later, the central government’s stake will be reduced to 26 percent”, she said.
Initially, the Government will have a 100 percent share, and the Bank with initial funding of Rs 5000 crore, will be able to get funding from RBI, commercial banks, Asian Development Bank, and from the World Bank too.
Ms. Sitharaman further said that the infrastructural development sector has been a very risky one and commercial banks are not ready to take this risk for the long term. Therefore, a separate institute was needed to speed up infrastructural development and reduce the risk, she added.
“This bank will be set up under the supervision of the Reserve Bank and it will do financial management for infrastructure development. This will increase competition and speed up development projects”, she said.
Ms. Sitharaman also said that with the formation of this bank, a long-term finance facility will be available for the infrastructural projects at cheaper rates. With the setting up of this bank, the participation of the Government and private sector in the infrastructural development will be ensured, she added.