The Indian government has introduced a significantly reduced guarantee fee of just 0.1% for borrowings made by the National Bank for Financing Infrastructure and Development (NaBFID) from international institutions like multilateral bodies and sovereign wealth funds. This move, detailed in an amendment to the NaBFID General Rules, 2022, aims to make it easier and cheaper for NaBFID to access foreign capital. By lowering borrowing costs, the government intends to strengthen NaBFID's capacity to finance crucial infrastructure projects across the country.
The Ministry of Finance has issued a key notification under the National Bank for Financing Infrastructure and Development Act, 2021, introducing concessional government guarantee fees to support the financial strength of the country's premier development finance institution, NaBFID.
As per G.S.R. 514(E), published in the Official Gazette on July 30, 2025, the Central Government has amended the National Bank for Financing Infrastructure and Development General Rules, 2022, through the National
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FAQ :
The new concessional government guarantee fee for borrowings by NaBFID from specified international institutions is 0.1% annually.
NaBFID can borrow from multilateral institutions, sovereign wealth funds, and other foreign institutions specified by the government.
The reduced fee aims to facilitate NaBFID's access to low-cost foreign capital, thereby enhancing its ability to fund critical infrastructure projects.
The notification, G.S.R. 514(E), was published in the Official Gazette on July 30, 2025.
Yes, the Central Government has the power to further reduce this concessional fee for borrowings aligned with purposes mandated by the Central Government.
NaBFID must submit a detailed request outlining borrowing terms, parties involved, and the intended use of funds.