Section 2. Amendment of section 18

2. Amendment of section 18. —In section 18 of the principal Act, in sub-section (1), in the Explanation , in clause (a), in sub-clause (ii), after the words "or from the Small Industries Bank", the words "or from the National Bank for Financing Infrastructure and Development or from the other development financial institution" shall be inserted. 2. Therefore, it has been decided to set up a statutory Institution to be called the National Bank for Financing Infrastructure and Development as the principal development financial institution and development bank for infrastructure financing. Its aim is to address market failures that stem from the longterm, low margin and risky nature of infrastructure financing. The Institution shall be wholly owned by the Central Government to begin with in order to foster confidence on its stability and sustainability and to raise resources at competitive rates. The Government will provide the Institution with grants and contributions, guarantees at concessional rates for foreign borrowings and any other concessions. Dilution or sale of stake may be considered once the Institution has achieved stability and scale in its business operations but the Government would at all times hold twenty-six per cent. of the paid-up voting equity share capital of the Institution. 3.The Institution shall have both developmental and financial objectives. Among other things, this would include developing a deep and liquid bond market of international standards for long-term infrastructure financing in India including through widening of the issuer and investor base. It would also facilitate the development of markets for interest rate derivatives, credit derivatives, currency derivatives and such other innovative financial instruments as may be necessary for infrastructure financing. The financing objectives would involve establishing a credible framework that attracts equity investments from domestic and global institutional investors as well as debt investments, including green finance, from investors, aligned to their risk appetite and asset-liability profile, in order to cater the financing needs of Indian infrastructure sector. 2. I further declare that I will not communicate or allow to be communicated to any person not legally entitled thereto any information relating to the affairs of the said Institution or to the affairs of any person having any dealing with the said Institution or will I allow any such person to inspect or have access to any books or documents belonging to or in the possession of the said Institution and relating to the business of the said Institution or the business of any person having any dealing with the said Institution. Signed before me (Signature) THE SECOND SCHEDULE ( See section 47) AMENDMENTS TO THE RESERVE BANK OF INDIA ACT, 1934