New Delhi, Mar 24,2021: The Lok Sabha on Tuesday passed The National Bank for Financing Infrastructure and Development Bill, 2021 by voice vote.
The Bill seeks to establish the National Bank for Financing Infrastructure and Development.
Its objective is to support the development of long-term non-recourse infrastructure financing in India including development of the bonds and derivatives markets necessary for infrastructure financing and to carry on the business of financing infrastructure.
Replying to the debate on The National Bank for Financing Infrastructure and Development
Bill, 2021, Union Finance Minister Nirmala Sitharaman said the banking institution will be a statutory institution and it will be answerable to the Parliament.
Ms Sitharaman said data on why some banks and developmental institutions did not perform as expected has been provided to the House at regular time intervals over the years.
“The new Bill has come out of all the learnings that we have gathered from such data. Infrastructural investments are huge and thus risky. The Bill will help to avert this adversity,” the Union Finance Minister said.
‘Asset-liability mismatch has also made it necessary for introduction of the Bill,’ she said.
‘Corporate bond market is not mature and thus cannot bankroll infrastructure projects. Thus faced with these problems, the Bill is the need of the hour,” the Union Finance Minister said.
Ms Sitharaman said only using tax payer money to fund infrastructure projects would take 100 years for completion of such undertakings.
Thus, the Bill meets financial as well as social imperatives, she said.
‘Foreign investments would be roped in due to the government structure which we will provide. Equal representation of government and private players in the banking institution will help keeping it transparent and accountable, ” the Union Finance Minister said.
This institution will play a role towards dispute resolution in infrastructure projects financing, she said.
