Parliament approves bill to set up National Bank for Financing Infrastructure and Development to provide long-term funding for projects amid opposition claims that the body was kept outside the purview of investigation and vigilance mechanisms.
The National Bank for Financing Infrastructure and Development Bill-2021 was passed by the Rajya Sabha on Thursday, is aimed at providing long-term funding to infrastructure projects including in transport, energy, water, sanitation, telecommunications, education sector. The Lok Sabha had passed the Bill on Tuesday.
Finance Minister Nirmala Sitharaman said the development finance institution was required as banks, which do short-term borrowing, could face an asset-liability mismatch if they resorted to long-term lending.
“This asset-liability mismatch is not good for the financial sector,” she said responding to the two-hour debate on the Bill.
Congress member Jairam Ramesh said the Bill kept the proposed NaBFID, which will be using huge amounts of government money, outside the purview of the CBI, CAG and CVC.
“No oversight whatsoever, no CBI, no CVC, no CAG. I can understand CBI and CVC but why no CAG,” Ramesh said, adding that he failed to see the logic behind this.
Sitharaman rejected Ramesh’s claims that the NaBFID was beyond oversight and said the the institution was duty bound to present its reports to Parliament every year.
“Audited reports are going to come in here. And as and when the Government is going to ask them for a report, they are duty bound to give it and it shall come here. So, Parliament's oversight annually is envisaged and built into the Act itself,” Sitharaman said.
She said the NaBFID will initially be 100 per cent owned by the government and it could be brought down at a later stage to 26 per cent. The institution would fund projects from the 7,000 odd identified by the National Infrastructure Pipeline.
(Published 25 March 2021, 12:42 IST)
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