Economics • Banking & FinanceMedium
What is the primary mandate of the 'National Bank for Financing Infrastructure and Development (NaBFID)' established in India?
A. To provide direct micro-credit support to rural artisans and street vendors.
B. To act as a specialized development financial institution (DFI) for funding long-term infrastructure projects in India.✓ Correct Answer
C. To regulate digital payment gateways and ensure interoperability among UPI apps.
D. To function as an asset reconstruction company for purchasing non-performing assets of public sector banks.
💡 Solution & Explanation
NaBFID was set up as a statutory development financial institution under the National Bank for Financing Infrastructure and Development Act of 2021 to support long-term infrastructure financing in India. Unlike commercial lenders that rely on short-term deposits, this institution provides specialized funding and catalyses private investment for mega projects. This helps bridge critical infrastructural gaps identified in the National Infrastructure Pipeline.
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