Reimagining the DFI: The role has to be thought through creatively

It was clear even when the business blueprint of IDFC Ltd was being drawn up that a model based on a DFI which floated bonds (retail or wholesale) may not work

Twenty-three years after IDFC Ltd — the last development finance institution (DFI) — was set up, Finance Minister Nirmala Sitharaman wants the model to be revisited. This time around, “it is for promoting infrastructure funding.” It’s a departure from the DFI’s earlier avatar when, as K V Kamath puts it: “It was for both project finance and infrastructure.”

The ecosystem has since changed, says the former president (and the first) of the New Development Bank of BRICS: “We have pension, insurance and provident funds, which can offer long-term finance for projects.” The move to hike the foreign direct investment in insurance