State-owned National Bank for Financing Infrastructure and Development (NaBFID) on Friday reported an 88 per cent jump in net profit at Rs 360 crore for the June quarter of this financial year.
The Mumbai-based development financial institution (DFI) had posted a net profit of Rs 192 crore in the year-ago period.
Total income in the first quarter of the current fiscal rose to Rs 432 crore, from Rs 212 crore in the same period a year ago, NaBFID said in public notice.
Reserve (excluding revaluation reserves and including Grant received from Government of India) of the DFI improved to Rs 6,921 crore, over Rs 5,360 crore in June 2022.
This DFI was created through the National Bank for Financing Infrastructure and Development (NaBFID) Act 2021 and the government committed a Rs 5,000-crore grant over and above Rs 20,000-crore equity capital.
Finance Minister Nirmala Sitharaman in the Union Budget 2021-22 said the government will set up a development financial institution (DFI) to catalyse investment in the fund-starved infrastructure sector.
The DFI has been set up to support the development of long-term non-recourse infrastructure financing, including the development of the bonds and derivatives markets, necessary for infrastructure financing and to carry on the business of financing infrastructure.
The NaBFID has been established as a statutory body to address market failures that stem from the long-term, low margin and risky nature of infrastructure financing.
It will help fund about 7,000 infra projects under the National Infrastructure Pipeline (NIP), which envisages an investment of Rs 111 lakh crore by 2024-25.
Infra spending has a multiplier effect on the economy. This means that not only does the project contribute immediately through increased demand for labour and construction materials but also through the second order effects in terms of improved connectivity.