Modi cabinet plans to form new banks for financing large projects

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The central government has approved the formation of the Development Finance Institute (DFI) in the country. The decision was taken at a meeting of the Union Cabinet on Tuesday. After the meeting, Finance Minister Nirmala Sitharaman made the announcement at a press conference. She said the Development Finance Bank would act as an investment bank. This will fund the construction project.

The decision was taken at a cabinet meeting chaired by Prime Minister Narendra Modi. The finance minister said the government had announced the formation of a bank in the budget. Now the government is fulfilling its promise.

The finance minister said the agency would be launched anew. The next decision will be made by the board, which will be formed soon. The DFI will initially be given Rs 20,000 crore. It will be issued by the bank and invested in it. The government expects the DFI to raise Rs 3 lakh crore in the next few years. It will give investors a tax rebate. It can also be invested in Savannah funds as well as pension funds.

Finance Minister Sitharaman said no old bank was ready to fund the construction project. About 6,000 projects in the country are currently in need of funding. The bank has decided to set up a development finance institute due to the lack of a positive response. It was approved by the Cabinet today. Experienced personalities from the Infra sector will be selected as board members of the establishment.

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