NaBFID to support infra projects from first quarter of next fiscal: KV Kamath

The newly created National Bank for Financing Infrastructure and Development (NaBFID) will start lending to infrastructure projects by the first quarter of FY2022-23, chairman KV Kamath has said.

 

“The first approval (for loan) will be in the first quarter of the next accounting year. We should do it during the April period,” he informed at the 94th AGM of the industry chamber FICCI in New Delhi.

 

By then, the newly formed entity would have appointed a CEO and other key staff as it was important to have those components in place, he observed.

 

“Realistically speaking we are a bank, and we need to get the nuts and bolts of a bank right,” Kamath said.

 

He said the bank had got its policies and framework ready in a record period of 30 working days and was now identifying appropriate technologies to create a “fit for purpose institution” to service the infrastructure sector.

 

The creation of NaBFID was cleared by both houses of the Parliament in March. Its need was felt after the Central Government’s 2019 proposal to invest Rs 111 lakh crore in infrastructure projects till FY2025 under its very ambitious National Infrastructure Pipeline (NIP) initiative.

 

For instance, the average implementation lifecycle of big-ticket infrastructure projects like high-speed railways, airports, ports, highways, river interlinking, etc., is four years. Simply put, it requires spending of 20 per cent of the project pipeline of say Rs 80 lakh crore to kickstart a series of such schemes.

 

Kamath asserted that once operationalised, he would like to see Rs 3-4 lakh crore in loans being extended through this “catalysing institution” over the next three years.

 

He expressed confidence that NaBFID would be able to raise funds from primary sources like domestic capital markets, global capital markets and multilateral financial institutions.

 

The former chairperson of the new Development Bank of BRICS and CEO ICICI Bank also held that if the country got elements like infrastructure, manufacturing, digital and agriculture sectors right, the economy could register a comfortable 10-12 per cent growth over the next couple of years.

 

“Things are changing so fast that sometimes we take time to understand what’s happening in the market. And I am sure that people will look deeper to understand that there are so many undercurrents in the economy,” he declared.

 

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