DFI to get direct access to Reserve Bank of India's funding facilities

Govt may guarantee bonds, debentures and loans issued by the new institution

The new government-backed development finance institution (DFI) will get direct access to funding facilities by the Reserve Bank of India, helping the infrastructure lender to raise funds at a cheaper rate. The central government may guarantee the bonds, debentures, and loans issued by the new DFI if the infrastructure lender wants.

The DFI will be able to “borrow money from the Reserve Bank repayable on demand or on the expiry of fixed periods not exceeding ninety days from the date on which the money is so borrowed against the security of stocks, funds or securities ...,” according to the National Bank