NaBFID to start funding operations in railway, road, and energy sectors

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admin December 1, 2021
Updated 2021/12/01 at 1:55 PM

According to its recently appointed Chairman K.V. Kamath, the National Bank for Financing Infrastructure and Development (NaBFID) is set to commence financing operations with about 190-200 large infrastructure projects in the railway, roads, and energy sectors.

Last month, the government announced the senior banker’s nomination as head of the newly established development finance agency, which aims to catalyse investment in the country’s cash-strapped infrastructure sector.

According to Mr. Kamath, the National Infrastructure Pipeline (NIP) has 193 projects worth moreover 1,000 crores each.

“So, I believe we’ll start with these 190-200 projects, which will give us a reasonably big slate to look at for the first year or two.” Then we’ll go further into others, which may be in the private sector, other regions, or elsewhere,” he added.

“For example, the monetization pipeline,” he added, the development finance organisation would look into additional responsibilities it may play for the government.

“We haven’t reached a decision… Mr. Kamath said, “Given that we have resources, we can leverage that capital very rapidly and possibly create a bridge; these are early ideas; we need to debate it internally and see all the possibilities that we see in the marketplace.”

The NIP, which has a $1.5 trillion goal, encompasses critical areas including roads, railways, metro, and energy, among others.

“There are social programmes and irrigation projects in this.” So, we’ll approach things with an open mind and evaluate what’s needed at the time. Where will our money be most useful, I’ll put it this way, all of this will help to forward the economic agenda,” he added.

When asked when the NaBFID would fill other critical positions, Mr. Kamath said that he has just been in this position for 15 days and that the search for a CEO is underway. “It will go via the Banking Bureau… that is the path it will go.” That is something we expect to happen soon.

In response to a question on the slow loan growth, he noted that the current credit offtake is mostly driven by the retail consumer, and that most of the loans are likely modest.

“I believe we should let it grow there.” And the larger loans, such as infrastructure loans, should come from the market, whether via bonds or organisations like NaBFID, one or more of which will be established, then I believe we will see a holistic expansion of the country’s economy,” Mr. Kamath added.

 

Source: The Hindu

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