Context:
The Ministry of Finance has set a 0.1% concessional guarantee fee for the National Bank for Financing Infrastructure and Development (NaBFID) to enable access to low-cost foreign capital for infrastructure development.
Key Highlights:
- Concessional Rate Details:
- The 0.1% concessional fee applies to government guarantees for borrowings from:
- Multilateral development banks
- Sovereign wealth funds
- Other notified foreign financial institutions
- The fee is payable at the time of guarantee issuance and annually every April 1 thereafter.
- Objective:
- To enable NaBFID to raise offshore funding at reduced costs.
- Supports funding of critical infrastructure projects aligned with India’s growth agenda.
- Credit Ratings for NaBFID:
- Moody’s: Baa3 (Stable)
- Fitch Ratings: BBB- (Stable)
- Both are at par with India’s sovereign credit rating, facilitating investor trust.
About NaBFID
- Established in 2021 through an Act of Parliament.
- Functions as a specialized Development Finance Institution (DFI).
- Aims to:
- Bridge long-term infrastructure financing gaps
- Promote bond market and derivatives market development in India
