Veteran banker KV Kamath has been appointed as chairperson of the new development finance institution. The National Bank For Financing Infrastructure and Development was announced in the budget and is currently in the process of being set up.
NaBFID will have a board comprising 13 members, including a chairman, four whole-time directors and two government nominees. The remaining will be independent directors. It also intends to hire key management from the private sector based on market-driven compensation metrics, government officials have indicated.
New approach to building #AatmaNirbharBharat!
Central Government has appointed Shri K. V. Kamath to the post of Chairperson, National Bank for Financing Infrastructure and Development, a newly set up DFI in India.@FinMinIndiaKamath has long experience in the Indian banking sector and has also led a development finance institution in the past.
For about the first four decades of its existence, ICICI Bank Ltd., which Kamath eventually headed as the chief executive officer, was a development finance institution. Together with IDBI Bank Ltd. and later IDFC Ltd., these institutions were intended to help finance the country's infrastructure development.
The model, however, proved challenging and most, including ICICI, made the transition to universal banking, with Kamath leading the institution away from being a project financier to a retail banking giant. That was in the late 1990s and the early 2000s.
In the years after retiring from ICICI Bank, Kamath also headed the New Development Bank, formerly referred to as the BRICS Development Bank.
The proposed National Bank For Financing Infrastructure and Development is likely to be operational by December 2021, BloombergQuint reported in July.
Finance Minister Nirmala Sitharaman, while presenting the union budget, said the government will provide Rs 20,000 crore as initial capital for the institution. It will leverage that and raise up to Rs 3 lakh crore for lending purposes, Sitharaman had said.
The National Bank For Financing Infrastructure and Development Bill, 2021, was then introduced and passed in March by both houses of the parliament. The NaBFID Act states that the government may guarantee bonds and debentures at the institution's request.
Questions around the extent of guarantee and whether special regulatory dispensation will be provided to this entity remain unanswered.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
