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The Rajya Sabha passed the National Bank for Financing Infrastructure and Development (NBFID) on Thursday. The Opposition alleged that the proposed bank will undermine existing regulatory frameworks, including CAG and CVC. Finance Minister Nirmala Sitharaman denied this and said that the audit report of the new bank will be tabled in Parliament and she hoped that the bank will bring more domestic and foreign investment in infrastructure sector.
Companies Act
Initiating the debate on the Bill, senior Congress MP and former Minister Jairam Ramesh said the Congress, in the past, created such institutions as companies under the Companies Act. “This was the model that we adopted,” he said citing the examples of IDBI, ICICI and IDFC.
Ramesh said huge resources are going to be mobilised using NBFID. “No oversight whatsoever, no CBI, no CVC, no CAG. I can understand CBI and CVC but why no CAG? In the last five years, the number of CAG reports has come down dramatically. In 2014, CAG submitted 55 reports. In 2020, the CAG submitted 14 reports. The CAG is a constitutional body. The Public Accounts Committee is the most important Committee of Parliament. This organisation, that we are creating, where paid-up-capital is of ₹1-lakh crore, Government equity is 26 per cent, with loan portfolio of ₹5-lakh crore. No external oversight, no external surveillance, no external monitoring. Madam Finance Minister, I submit to you that this is the most undesirable state of affairs,” he said.
Sitharaman said the data of NBFID will be audited and the report will be placed before both the Houses of Parliament.
She said the new law will invite more investment, both foreign and domestic, to the country.
Sitharaman said the Bill is to enable the Centre, multilateral institutions, sovereign wealth funds and such other institutions to hold equity in the NBFID. She claimed that the new institution will provide financial assistance to infrastructure projects.
She said the Bill provides for the NBFID to borrow or raise money by way of loans or otherwise, both in rupees and foreign currencies. It will also ensure adequate safeguards for decision making to address risk aversion.
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