Q. With reference to the National Bank for Financing Infrastructure and Development (NBFID), consider the following statements:
Select the correct answer using the codes given below:
Q. With reference to the National Bank for Financing Infrastructure and Development (NBFID), consider the following statements:
Select the correct answer using the codes given below:
The correct option is C 1 and 4 only
Explanation:
Statement 1 is correct: The National Bank for Financing Infrastructure and Development (NBFID) is the principal development financial institution (DFIs) for infrastructure financing. DFIs are set up for providing long-term finance for such segments of the economy where the risks involved are beyond the acceptable limits of commercial banks and other ordinary financial institutions.
Statement 2 is incorrect: Unlike banks, DFIs do not accept deposits from people. They source funds from the market, government, as well as multilateral institutions, and are often supported through government guarantees.
Statement 3 is incorrect: Initially, the central government will own 100% shares of the institution which may subsequently be reduced up to 26%.
Statement 4 is correct: NBFID may borrow money from:
- (i) central government,
- (ii) Reserve Bank of India (RBI),
- (iii) scheduled commercial banks,
- (iv) mutual funds, and
- (v) multilateral institutions such as the World Bank and Asian Development Bank.
Explanation:
Statement 1 is correct: The National Bank for Financing Infrastructure and Development (NBFID) is the principal development financial institution (DFIs) for infrastructure financing. DFIs are set up for providing long-term finance for such segments of the economy where the risks involved are beyond the acceptable limits of commercial banks and other ordinary financial institutions.
Statement 2 is incorrect: Unlike banks, DFIs do not accept deposits from people. They source funds from the market, government, as well as multilateral institutions, and are often supported through government guarantees.
Statement 3 is incorrect: Initially, the central government will own 100% shares of the institution which may subsequently be reduced up to 26%.
Statement 4 is correct: NBFID may borrow money from:
- (i) central government,
- (ii) Reserve Bank of India (RBI),
- (iii) scheduled commercial banks,
- (iv) mutual funds, and
- (v) multilateral institutions such as the World Bank and Asian Development Bank.
