Cabinet approves formation of Development Finance Institution: FM Sitharaman

Union Finance Minister Nirmala Sitharaman on March 16 announced that cabinet has approved formation of Development Finance Institution (DFI) for development and financial objectives. "During Budget, we had mentioned that we will be setting up a national bank to fund infrastructure and developmental activities. The past attempts to have alternative investment funds were taken up, but for various reasons, we ended up with no bank which could take up long-term risk, which is very high and fund development." She further said, "Union Cabinet has already cleared the setting up of a Development Finance Institution (DFI), in acknowledgement of the realization that both development and financial objectives will matter for setting up a DFI. It will help raise long-term funds; Budget 2021 will provide initial amount. The Capital infusion will be of about Rs 20,000 crore this year; initial grant will be Rs. 5,000 crore, additional increments of grant will be made within limit of Rs 5,000 crore."