National board for Financing Infrastructure Development needs to stick to the basics of sound governance to fulfill its role effectively. Explain (200 Words)
Refer - Business Line
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· The National Bank for Financing Infrastructure and Development (NabFID), headed by veteran banker KV Kamath, is set to commence operations from next month.
· Its task is cut out: to be the overarching player in funding 7,000 projects worth Rs 111 lakh crore in the National Infrastructure Pipeline over the next few years.
· The infra lending sources of the post-universal DFI era banks, sector-specific DFIs, private NBFCs and other sources such as equity capital and internal reserves of companies have fallen short in qualitative and quantitative terms.
· NabFID is likely to source finance at concessional rates, not least because the RBI will open a window for infra lending a return to the past.
· This had been discontinued on the recommendation of the Narasimham Committee which had called for a level playing field between DFIs and other players.
· For NabFID to vindicate its existence, it should learn from the past. The erstwhile DFIs, such as IFCI and IDBI, were seen to be hand-in-glove with corrupt managements, instead of being objective lenders and investors at the same time.
· The IBC provides a ready tool to sack incumbent managements. A now-consolidated banking system can provide a source of inexpensive capital, without much asset-liability mismatch.
· NabFID is supposed to act as a coordinating body. It can synergise the lending and execution of projects.
Lakshmi gowri 3 years
kindly review my answer
IAS Parliament 3 years
Try to include data to support your arguments. Keep Writing.
Lakshmi gowri 3 years
