“From the next quarter, the quarter starting from April, we should be operationalised and have the ability to do the first loan,” said KV Kamath, chairman, NaBFID, during a speech at the covention of Indian Construction Equipment Manufacturers Association.
The National Bank for Financing Infrastructure and Development (NaBFID) will commence its business operations in the first quarter of the next financial year by approving the first loan for the project. It will also finance projects that are part of the t of the National Monetisation Pipeline.
“From the next quarter, the quarter starting from April, we should be operationalised and have the ability to do the first loan,” said KV Kamath, chairman, NaBFID, during a speech at the covention of Indian Construction Equipment Manufacturers Association.
The selection of the CEO of NaBFID and other officials to run the bank is underway. Last year, the government has set up NaBFID as a development financial institution (DFI) to support the development of long-term infrastructure financing. The central bank, earlier this month, said NaBFID will be regulated and supervised as an all-India financial institution by it under the RBI Act, 1934.
The aggregate monetisation potential in National Monetisation Pipeline (NMP) is estimated at around Rs 6 lakh crore via core assets of the central government, over four years between FY22 and FY25. Sectors such as roads, railways, oil & gas pipeline, power and telecom capture around 83% of the total pipeline value. Kamath said that the resources will be free after asset monetisation and it will come back to the industry.
Asset monetisation, based on the philosophy of creation through monetisation, is aimed at tapping private sector investment for new infrastructure creation. The NITI Aayog has developed the pipeline, in consultation with infrastructure line ministries, based on the mandate for ‘asset monetisation’ under Union Budget 2021-22. The infrastructure projects give good investment opportunities for the institutions like pension funds and insurance companies as they have long term liabilities. There are expectations that some banks will also step in for better opportunities.
Banks have become over cautious on lending to infrastructure due to their past experiences where they have faced high NPAs from that segment. The recovery in NPAs and good capital adequacy ratio will allow banks to explore more.