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Govt. is planning to set up Development Finance Institution (DFI) model for infrastructure sector

The government is considering setting up a Development Finance Institution model (DFI ) to support the infrastructure sectors. It is estimated that there will be required around Rs. 100 lakh crores investments in the next 5 years. The Union budget 2021-22 is expected to set the road map for creating a new DFI in the country. The earlier Development Finance Institutions--ICICI, IDBI and IDFC, have all converted into commercial banks to tap the retail deposits as well as retail assets like home loan, car loan, consumer loan, credit cards and personal loans. The banking sector given a backbone support to the infrastructure sector in the last decade, but the recent mismatches in asset, liabilities and deterioration in asset quality have forced banks to withdraw from such lending. It is expected, that by establishing Development Finance Institutions (DFIs), distressed infrastructure sector can be revived once again.

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