Section 4. Debt securities, including bonds and debentures, issued by the Institution should be considered as e

4. Debt securities, including bonds and debentures, issued by the Institution should be considered as eligible for the purposes such as approved investments, securities, etc., as per limits and conditions to be prescribed by Indian financial regulators for their regulated entities. The Institution would also be empowered to lend to, or invest in, infrastructure projects located in India, or partly in India and partly outside India, prioritising systemic risk mitigation, credit enhancement, subordinate debt, debt maturities suited to project life spans and to raise long-term finance for the same. The Institution may also be involved in project structuring, monitoring and monetisation of completed projects by itself or through its subsidiaries, etc., promoting innovation in financial products and services including by issuing long-term bonds with explicit or implicit sovereign guarantee, underwriting and dealer services. Overall, the Institution shall provide a supporting, technology enabled ecosystem across the life-cycle of infrastructure projects as a provider, enabler and catalyst for sustainable infrastructure financing in India with the backing of the Government. The Institution shall support the bond market with the aim of fostering complementarity of market raised debt with lending for infrastructure projects. 4. Amendment of section 46C. —In section 46C of the principal Act, in sub-section (2),— (a) in clause (c), after the words "or the Small Industries Bank," at both the places, the words "or the National Bank for Financing Infrastructure and Development or the other development financial institution," shall be inserted; (b) in clause (d), after the words "or the Small Industries Bank,", the words "or the National Bank for Financing Infrastructure and Development or the other development financial institution," shall be inserted. THE THIRD SCHEDULE ( See section 48) AMENDMENTS TO THE BANKING REGULATION ACT, 1949 4. Amendment of section 36AD. —In section 36AD, in sub-section (3), after the words "the Small Industries Bank", the words ", the National Bank for Financing Infrastructure and Development or the other development financial institution," shall be inserted. STATEMENT OF OBJECTS AND REASONS India needs significant investments in infrastructure. Infrastructure financing requires long-term and non-recourse financing, which is inherently risky in nature due to higher credit costs, high risk of delay and failure of projects. Traditionally, banks and financial institutions in India have been an important source of financing for infrastructure sector. While banks rely heavily on short-term liabilities, infrastructure financing essentially involves long-term finance. Consequently, exposure to long-term infrastructure financing has been a fundamental source of asset-liability mismatch on the balance-sheets of the banks which raises systemic concerns. On the other hand, the Indian corporate bond market is not sufficiently deep and is inadequately mature to meet India's infrastructure financing requirements. In view of this, Government's intervention is necessary to facilitate and to enable flow of low cost, long-term, patient capital (primarily debt) from India or abroad into greenfield infrastructure projects to foster sustainable economic development. Solutions for financing would be part of overall policy interventions addressing challenges to infrastructure development.