Global FIIs are already ready with funding proposals: KV Kamath

KV Kamath, Chairman, National Bank for Financing Infrastructure and Development (NaBFID), has said that funding is not going to be a constraint – Global FIIs are already ready with funding proposals. There are three primary sources of raising funds – domestic capital market, global capital markets and multilateral financial institutions.

Addressing the FICCI’s Annual Convention and 94th AGM, Kamath said, “Today, it’s an open economy, market driven economy and there is greater understanding of need for vast amount of infrastructure requirements.”

He further stated that there are three primary sources of raising funds – domestic capital market, global capital markets and multilateral financial institutions. He added that the institutions will look into innovative instruments in addition to just long-term lending. Kamath also informed that large amount of funds are available for multiple sectors and are open to different methodologies.

To the question on how different or similar will NaBFID be from the DFIs of the past, Kamath opined that we are operating under a completely different scenario today vis-a-vis 1995-1996 when DFIs came under pressure. “We have a vibrant insurance and pension business, open marketplace and most importantly, we have recognised the need for all kind of infrastructure. This would make funding by NaBFID different from the DFIs of the past. Moreover, NaBFID has no constraints on constructing the type of instruments that the borrowers might require,” he added.

Kamath mentioned that building a lean, fit for purpose institution, leveraging current technology at a low cost are some of the lessons he has drawn from his experience in working with ICICI and NDB, amongst others.

Speaking about the lending plan for the National Infrastructure Pipeline, Kamath highlighted that lending of Rs 3-4 lakh crore has been envisioned in the next three years. “This is only going to be a catalysing institution, there are going to be other players who will also supplement. Challenge is to have the right instruments of right tenor at right price available,” he said.

On being asked if the institution will be funding soft infrastructure, Kamath said, “We have to be open in this regard. The capital will have to flow in to the ‘Most-in-need’ sectors.”

He observed that the economy is expected to witness momentum in capacity utilisation and creation of new capacity going forward owing to strong cash flows and improved balance sheets of India Inc.

Dr Sangita Reddy, Immediate Past President, FICCI and Joint Managing Director, Apollo Hospitals Group, said, “the ability to fund infrastructure, the realisation that every rupee going into infrastructure fuels 200 other industries and has an impact on the entire economy is what we have continuously shared with the government. We are now excited to know about the availability of capital and roadmap for further acceleration of growth.”