The National Bank for Financing Infrastructure and Development Act, 2021

In force 48 sections Finance

An Act to establish the National Bank for Financing Infrastructure and Development to support the development of longterm non-recourse infrastructure financing in India including development of the bonds and derivatives markets necessary for infrastructure financing and to carry on the business of financing infrastructure and for matters connected therewith or incidental thereto.

Act 17 of 2021 Enacted 28 Mar 2021 Department Department of Financial Services

Administered by. Ministry of Finance, Department of Financial Services · Other Acts of 2021

Commencement. 19th April, 2021- Sections 2, sub-sections (1), (2) and (4) of section 3, 4 to 14, sub-section (3) of section 15, 16 to 23 and 25 to 48 vide notification No. S.O. 1657(E), dated 16th April, 2021, see Gazette of India, Extraordinary, Part II, sec. 3 (ii).

Preamble

THE NATIONAL BANK FOR FINANCING INFRASTRUCTURE AND DEVELOPMENT ACT, 2021
ACT NO. 17 OF 2021
28th March, 2021. An Act to establish the National Bank for Financing Infrastructure and Development to support the development of long term non-recourse infrastructure financing in India including development of the bonds and derivatives markets necessary for infrastructure financing and to carry on the business of financing infrastructure and for matters connected therewith or incidental thereto.
BE it enacted by Parliament in the Seventy-second Year of the Republic of India as follows:--

What this Act covers

Summary of The National Bank for Financing Infrastructure and Development Act, 2021

Overview The National Bank for Financing Infrastructure and Development Act, 2021, establishes a specialized bank to facilitate long-term financing for infrastructure projects in India, enhancing the country's development through strategic financial support.

Key Aspects

1. Establishment & Structure

• Body Corporate: Established with perpetual succession and a common seal.

• Headquarters: Located in Mumbai, with the flexibility to establish branches/offices within or outside India.

2. Objectives

• Developmental: To coordinate with various stakeholders for streamlined infrastructure financing.

• Financial: To lend/invest in infrastructure projects, promoting sustainable economic growth.

3. Capital & Ownership

• Authorised Share Capital: ₹100,000 crore, divided into fully paid-up shares of ₹10 each.

• Government Holding: The Central Government must hold at least 26% of the shares.

4. Functions & Powers

• Lending & Advances: With or without security, for infrastructure projects.

• Financial Instruments: Issue of participation certificates, debt securities, and promotion of securitisation.

• Intermediary Role: Acting as a financial intermediary for infrastructure development.

• Assistance: Providing technical, legal, marketing, and administrative support.

• Borrowing: Ability to borrow from the Reserve Bank of India under specified conditions.

5. Governance & Oversight

• Board of Directors: Oversees the bank's operations (composition and terms not fully detailed in the provided context).

• Accountability: Subject to audits, with requirements for balance sheets and annual reports.

6. Legislative Amendments

• Banking Regulation Act, 1949: Amended to accommodate the new bank's establishment and operations.

• Other Acts: Potential amendments to align with the bank's functional requirements (partially specified).

Limitations of the Provided Context

• Detailed Governance Structure: Specifics of the Board of Directors' composition, terms, and management hierarchy beyond the Chairperson's role are not provided.

• Comprehensive Functional Details: Only highlighted functions are summarized; a full list of powers and functions is not available in the context.

• Financial Provisions Beyond Share Capital and Borrowing: Detailed financial regulations and oversight mechanisms are partially covered.

Sections

Type to filter. 48 sections.

Legislative history

Legislative History: The National Bank for Financing Infrastructure and Development Act, 2021 Source: India Code and Ministry of Finance Official Records Short Title -The National Bank for Financing Infrastructure and Development Act, 2021 Act Number / Year - Act No. 17 of 2021 India Code Act ID - 202117 Introduced In - Lok Sabha Presidential Assent Date - March 28, 2021 Official Gazette Publication - March 28, 2021 Enforcement Date - April 19, 2021 Nodal Ministry - Ministry of Finance Precedent & Statutory Rationale 1. The Financing Gap in Long-Term Infrastructure Projects: o Prior to 2021, India's massive infrastructure push faced severe structural bottlenecks in long-term, non-recourse debt financing. Traditional commercial banks were constrained by asset-liability mismatch risks when lending for long-gestation infrastructure projects, and domestic corporate bond markets lacked depth for deep-tier financing. 2. Institutionalizing a Specialized Development Financial Institution (DFI): o Grounded in national economic strategy to accelerate infrastructure development under frameworks like the National Infrastructure Pipeline (NIP), the legislation was enacted to establish a specialized DFI—NaBFID—equipped to act as a provider, enabler, and catalyst for long-term infrastructure financing while fostering domestic bond and derivative markets. Parliamentary Trajectory & Enactment • Formulation: Developed and piloted by the Ministry of Finance under Union Finance Minister Nirmala Sitharaman, following structural announcements made in the Union Budget. • Parliamentary Passage: Introduced in Parliament, reviewed by the relevant Parliamentary Standing Committee, and subsequently passed by both the Lok Sabha and the Rajya Sabha during the budget session of March 2021. • Presidential Assent: Received formal Presidential Assent on March 28, 2021, entering the statute book as Act No. 17 of 2021. • Enforcement: Brought into active operational force starting April 19, 2021, through central notifications.

Rules made under this Act

5 sets of Rules. India Code publishes Rules as a record and a document rather than as text, so these are indexed here and not reproduced. All Rules.

National Bank for Financing Infrastructure Income Tax Exemption notification2022
National Bank for Financing Infrastructure and Development General (Amendment) Rules, 20222022
National Bank for Financing Infrastructure and Development General Regulations, 20222022
National Bank for Financing Infrastructure and Development General Rules, 20222022
National Bank for Financing Infrastructure and Development (Removal of Difficulties) Order, 20212021

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Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Every one of the 48 sections of this Act has its own page. This page is not a substitute for legal advice.