National Bank for Financing Infrastructure and Development

About National Bank for Financing Infrastructure and Development:

• 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 Institutionin 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.
• Regulated by: It shall be regulated and supervised by RBIas an All-India Financial Institution (AIFI).
• The principal idea behind the setup of NaBFID is to provide a dedicated and specialized institution focused on addressing the long-term financing needs of the infrastructure sector in India. 

What is Development Finance Institution?

• 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).