Context: Recently, the Indian government has officially designated the National Bank for Financing Infrastructure and Development (NaBFID) as a public financial institution under the Companies Act. 

• This step is expected to strengthen the nation's infrastructure financing framework in India.

Key highlights

• The Companies Act of 2013 regulates incorporation, responsibilities, directors, and dissolution of companies. It partially replaced the Companies Act, 1956.

• The move will enhance the bank's capacity to finance large-scale infrastructure projects, thereby bolstering the country's infrastructure development.

• This will help the government fortify the nation's infrastructure finance structures.

About National Bank for Financing Infrastructure and Development (NaBFID)

• NaBFID, a specialised Development Finance Institution (DFI), was set up in 2021, by an Act (The National Bank for Financing Infrastructure and Development Act, 2021).

• The Bank was set up with the essential objectives of addressing the gaps in long-term non-recourse finance for infrastructure development, strengthening the development of bonds and derivatives markets in India, and sustainably boosting the country's economy.

• It is India's fifth All India Financial Institution (AIFI) to support long-term infrastructure financing, including the development of bonds and derivatives markets.

• NaBFID focuses on addressing gaps in long-term infrastructure finance and developing bonds and derivatives markets to boost the economy.

• As of February 2024, NaBFID as a specialised Development Finance Institution (DFI) has sanctioned over Rs 86,804 crore for infrastructure projects across the country, with 50% of the sanctions having long tenures of 20 to 50 years. NaBFID plans to sanction over Rs 3 lakh crore by March 2026.

Other Four AIFIs:

1. Export-Import Bank of India (EXIM Bank)

2. National Bank for Agriculture and Rural Development (NABARD)

3. National Housing Bank (NHB)

4. Small Industries Development Bank of India (SIDBI)