Government will soon appoint head of the National Bank for Financing Infrastructure and Development

Finance Ministry will soon start the process for appointing a managing director (MD) and deputy managing directors (DMDs) of the newly set up Rs 20,000 crore development finance institution, namely National Bank for Financing Infrastructure and Development (NaBFID).

Government has envisioned the institution for expediting investment in the fund-starved infrastructure sector.

Last month, the government had appointed veteran banker K V Kamath as the chairperson of NaBFID for three years.

According to sources, the finance ministry will soon intimate the Banks Board Bureau (BBB) about the appointment of MD and DMDs of NaBFID.

The bureau will issue advertisements and undertake a selection process, sources said.

The BBB is the headhunter for state-owned banks and financial institutions.

The MD, DMDs and whole-time directors would not hold office after attaining the age of 65 years and 62 years respectively.

As per the NaBFID Act 2021, the institution would have one managing director and not more than three DMDs.

The government has committed Rs 5,000 crore grant over and above Rs 20,000 crore equity capital.

The central government will provide grants by the end of the first financial year. The government will also provide guarantee at a concessional rate of up to 0.1 per cent for borrowing from multilateral institutions, sovereign wealth funds, and other foreign funds.

The development finance institution (DFI) has been established as a statutory body to address market failures that stem from long-term, low margin and risky nature of infrastructure financing.