The National Bank for Financing Infrastructure and Development (NaBFID) is a specialized Development Finance Institution (DFI) established as a body corporate. Its creation is rooted in the National Bank for Financing Infrastructure and Development Act, 2021, which received the President's assent on March 28, 2021, and came into force on April 19, 2021. The institution was created to solve the problem of long-term funding gaps in India's infrastructure sector, as commercial banks face inherent limitations in financing long-gestation projects due to asset-liability mismatches. NaBFID's head office is in Mumbai.
NaBFID has both financial and developmental objectives, as set out in Section 17 of the Act. Its financial objective is to directly or indirectly lend, invest, or attract investments for infrastructure projects in sectors like transport, energy, and urban development. Key mechanisms include extending loans and advances, taking over or refinancing existing loans, and providing guarantees and credit enhancement. The developmental objective is to facilitate the building of relevant institutions and strengthen the domestic bonds and derivatives markets necessary for infrastructure financing. The institution is regulated and supervised by the Reserve Bank of India (RBI) as an All India Financial Institution (AIFI) under Sections 45L and 45N of the Reserve Bank of India Act, 1934.
NaBFID connects to the broader concept of DFIs, which have a history in India dating back to the Industrial Finance Corporation of India (IFCI) in 1948. It is the fifth AIFI, joining institutions like the EXIM Bank, NABARD, NHB, and SIDBI. The rationale for its establishment is linked to policy interventions like the National Infrastructure Pipeline and PM GatiShakti. Recently, the Government of India notified NaBFID as a "public financial institution" under the Companies Act, 2013, which enhances its capacity to fund large-scale projects. Initially, the Central Government held 100% of its shares, with a commitment to provide a grant of ₹5,000 crore.