Govt aims to set up a development finance institution in 3-4 months

The government plans to set up a Development Finance Institution (DFI) in the next three to four months with a view to mobilise the Rs. 111 lakh crore required for funding of the ambitious national infrastructure pipeline, according to Financial Services Secretary Debasish Panda.

“We need a development financial institution as infra financing needs patient capital, and banks are currently not suited for lending for long-term projects which do not generate any cash for years,” he told.

Even deepening the bond market with regard to infrastructure financing was a matter receiving the Centre’s attention and there was a need to do something more in order to have a robust bond market for infrastructure financing, he said.

“To provide funding, to enhance credit rating of projects, a DFI is needed, and we are actively working on it, and soon such an institution will be in place. We are in the process of finalising details such as shareholding of the government and whether such a body will be formed through a statute.