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The proposed new Development Financial Institution (DFI) must attract &lsquo;patient capital&rsquo; investors as well as leading experts on its board and in top management, former deputy governor of RBI Rakesh Mohan said.</p>
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Patient capital refers to long term investment with no expectation of immediate returns.</p>
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Mohan has also served as executive director at the International Monetary Fund (IMF).</p>
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Mohan also proposed that the new DFI should be headquartered in Mumbai, India&rsquo;s financial capital. He also said that the first chief of the proposed DFI should be a person with India&rsquo;s best interests in mind.</p>
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Finance Minister Nirmala Sitharaman proposed setting up of a DFI in the Union Budget of 2021-22 to address issues relating to debt financing needs of the infrastructure sector. The minister said that a Bill will be introduced in Parliament to set it up with a provision of Rs 20,000 crore</p>
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&ldquo;The ambition is to have a lending portfolio of at least Rs 5 lakh crore for this DFI in three years-time,&rdquo; she had said. According to reports, financial services secretary Debasish Panda has said that India Infrastructure Finance Company Limited could be subsumed into the new DFI – the National Bank for Financing Infrastructure and Development.</p>
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The proposed DFI will play a crucial role in realising the National Infrastructure Pipeline, under which around 7,000 projects have been identified with an estimated Rs 111 lakh crore-worth of investment between 2020 and 2025.</p>
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