The National Bank for Financing Infrastructure and Development Act, 2021
Administered Ministry: Ministry of Finance / Department of Financial Services
Section
Section 21 Grants and contribution.
(1) The Central Government may support the Institution through grants or contribution, as and when necessary, in the form of cash or marketable Government securities.
(2) Without prejudice to the generality of the foregoing, the Central Government shall, by the end of the first financial year from the establishment of Institution, grant or contribute an amount of five thousand crore rupees to the Institution in the form of cash or marketable Government securities.
(2) Without prejudice to the generality of the foregoing, the Central Government shall, by the end of the first financial year from the establishment of Institution, grant or contribute an amount of five thousand crore rupees to the Institution in the form of cash or marketable Government securities.
Section 22 Concessional rate of Government guarantee.
The Government shall prescribe a concessional rate of fees, not exceeding 0.1 per cent. at which Government guarantee may be extended to the Institution for borrowings from multilateral institutions, sovereign wealth funds, and such other foreign institutions as may be prescribed.
Section 23 Hedging costs.
Hedging costs in connection with any borrowing of foreign currency by the Institution for the purposes of granting loans and advances or its repayment, to insulate the Institution from any fluctuations in the rates of exchange, may be reimbursed by the Central Government in part or in full.
Section 24 Disposal of profit accruing to Institution, to reserve fund.
(1) The Institution shall establish a reserve fund to which may be transferred such sums as the Board may deem fit out of the annual profits accruing to the Institution:
Provided that the sums to be transferred under this sub-section shall not be less than twenty per cent. of the annual profits accruing to the Institution.
(2) After making provisions for bad and doubtful debts, depreciation of assets and for all other matters for which provision is necessary or expedient or which is usually provided for by bankers and for the reserve fund referred to in sub-section (1), and after transferring a part of the profit to such other reserves or funds as may be considered appropriate, the Board may out of its net profits propose a dividend.
Provided that the sums to be transferred under this sub-section shall not be less than twenty per cent. of the annual profits accruing to the Institution.
(2) After making provisions for bad and doubtful debts, depreciation of assets and for all other matters for which provision is necessary or expedient or which is usually provided for by bankers and for the reserve fund referred to in sub-section (1), and after transferring a part of the profit to such other reserves or funds as may be considered appropriate, the Board may out of its net profits propose a dividend.
Section 25 Preparation of balance sheet and accounts.
(1) The balance-sheet and accounts of the Institution shall be prepared in such form and manner as may be prescribed.
(2) The Board shall cause the books and accounts of the Institution to be closed and balanced as on the 31st day of March each year or such other date as the Board may determine.
(2) The Board shall cause the books and accounts of the Institution to be closed and balanced as on the 31st day of March each year or such other date as the Board may determine.
Section 26 Audit.
(1) The accounts of the Institution shall be audited by auditors duly qualified to act as auditors under sub-section (1) of section 141 of the Companies Act, 2013 (18 of 2013), who shall be appointed by the Institution in general meeting of the shareholders out of the panel of auditors approved by the Reserve Bank for such term and on such remuneration as the Reserve Bank may fix.
(2) The auditors shall be supplied with a copy of the annual balance-sheet of the Institution and it shall be their duty to examine it together with the accounts and vouchers relating thereto and they shall have a list delivered to them of all books kept by the Institution and shall at all reasonable times have access to the books, accounts, vouchers and other documents of the Institution.
(3) The auditors may, in relation to such accounts, examine any director or any officer or other employee of the Institution and shall be entitled to require from the Board or officers or other employees of the Institution such information and explanation as they may think necessary for the performance of their duties.
(4) The auditors shall make a report to the Institution upon the annual balance-sheet and accounts examined by them and in every such report they shall state whether in their opinion the balance-sheet is a full and fair balance-sheet containing all necessary particulars and properly drawn up so as to exhibit a true and fair view of the state of affairs of the Institution and in case they had called for any explanation or information from the Board or any officer or other employee of the Institution, whether it has been given and whether it is satisfactory.
(5) The Institution shall furnish to the Central Government and the Reserve Bank within four months from the date on which its accounts are closed and balanced, a copy of its balance-sheet and accounts together with a copy of the auditor's report and a report of the working of the Institution during the relevant year, and the Central Government shall, as soon as may be after they are received by it, cause the same to be laid before each House of Parliament.
(2) The auditors shall be supplied with a copy of the annual balance-sheet of the Institution and it shall be their duty to examine it together with the accounts and vouchers relating thereto and they shall have a list delivered to them of all books kept by the Institution and shall at all reasonable times have access to the books, accounts, vouchers and other documents of the Institution.
(3) The auditors may, in relation to such accounts, examine any director or any officer or other employee of the Institution and shall be entitled to require from the Board or officers or other employees of the Institution such information and explanation as they may think necessary for the performance of their duties.
(4) The auditors shall make a report to the Institution upon the annual balance-sheet and accounts examined by them and in every such report they shall state whether in their opinion the balance-sheet is a full and fair balance-sheet containing all necessary particulars and properly drawn up so as to exhibit a true and fair view of the state of affairs of the Institution and in case they had called for any explanation or information from the Board or any officer or other employee of the Institution, whether it has been given and whether it is satisfactory.
(5) The Institution shall furnish to the Central Government and the Reserve Bank within four months from the date on which its accounts are closed and balanced, a copy of its balance-sheet and accounts together with a copy of the auditor's report and a report of the working of the Institution during the relevant year, and the Central Government shall, as soon as may be after they are received by it, cause the same to be laid before each House of Parliament.
Section 27 Returns and report.
The Institution shall furnish, from time to time, to the Central Government and to the Reserve Bank, such returns as the Central Government or the Reserve Bank may require.
Section 28 Receivables to be held in trust.
(1) Any sums received by a financial institution for refinancing from the Institution shall, to the extent of the accommodation granted by the Institution and remaining outstanding, be deemed to have been received by the financial institution in trust for the Institution and shall accordingly be paid by such financial institution to the Institution.
(2) Where any accommodation has been granted by the Institution to a financial institution, all securities held, or which may be held, by such financial institution on account of any transaction in respect of which such accommodation has been granted, shall be held by such financial institution in trust for the Institution.
(2) Where any accommodation has been granted by the Institution to a financial institution, all securities held, or which may be held, by such financial institution on account of any transaction in respect of which such accommodation has been granted, shall be held by such financial institution in trust for the Institution.
Section 29 Setting up of other development financial institution.
(1) Any person who intends to set up a development financial institution, in addition to the Institution established under this Act, shall make an application to the Reserve Bank for licence.
(2) The Reserve Bank may in consultation with the Central Government, grant licence subject to such criteria, terms and conditions as may be specified by the Reserve Bank by regulations.
(3) Any institution to which licence is granted under sub-section (2) shall be subject to the provisions of the Reserve Bank of India Act, 1934 (2 of 1934) or the Banking Regulation Act, 1949 (10 of 1949), as the case may be.
(4) The regulations made by the Reserve Bank shall apply to the Institution established under this Act to such extent as are not inconsistent with the provisions of this Act.
(2) The Reserve Bank may in consultation with the Central Government, grant licence subject to such criteria, terms and conditions as may be specified by the Reserve Bank by regulations.
(3) Any institution to which licence is granted under sub-section (2) shall be subject to the provisions of the Reserve Bank of India Act, 1934 (2 of 1934) or the Banking Regulation Act, 1949 (10 of 1949), as the case may be.
(4) The regulations made by the Reserve Bank shall apply to the Institution established under this Act to such extent as are not inconsistent with the provisions of this Act.
Section 30 Officers and employees.
(1) The Institution may appoint such number of officers and other employees as it considers necessary or desirable for the efficient performance of its functions and determine the terms and conditions of their appointment of service.
(2) The duties and conduct, terms and other conditions of service including their salaries and allowances and the establishment and maintenance of provident fund or any other fund for the benefit of the officers and other employees of the Institution appointed under sub-section (1) shall be such as may be specified by regulations:
Provided that the salaries and allowances payable to the officers and employees shall be determined by the Nomination and Remuneration Committee guided by the market standards.
(3) The Institution may depute any officer or any member of its staff for such period and on such terms and conditions as it may determine, to any other institution including an infrastructure finance or development institution.
(4) The Institution may receive or take on deputation any officer or other employee from any institution including an infrastructure finance or development institution, for such period and on such terms and conditions as may be specified by regulations.
(5) Nothing contained in this section shall empower the Institution to depute any officer or member of its staff to any institution on any salary, emoluments or other terms and conditions which is or are less favourable to him than that or those to which he is entitled to immediately before such deputation.
(2) The duties and conduct, terms and other conditions of service including their salaries and allowances and the establishment and maintenance of provident fund or any other fund for the benefit of the officers and other employees of the Institution appointed under sub-section (1) shall be such as may be specified by regulations:
Provided that the salaries and allowances payable to the officers and employees shall be determined by the Nomination and Remuneration Committee guided by the market standards.
(3) The Institution may depute any officer or any member of its staff for such period and on such terms and conditions as it may determine, to any other institution including an infrastructure finance or development institution.
(4) The Institution may receive or take on deputation any officer or other employee from any institution including an infrastructure finance or development institution, for such period and on such terms and conditions as may be specified by regulations.
(5) Nothing contained in this section shall empower the Institution to depute any officer or member of its staff to any institution on any salary, emoluments or other terms and conditions which is or are less favourable to him than that or those to which he is entitled to immediately before such deputation.
Section 31 Powers of Central Government to make rules. 2 docs
(1) The Central Government may, by notification, make rules to carry out the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:--
(a) institutions that may hold shares of the Institution under sub-section (3) of section 5;
(b) the manner of election of directors by shareholders under clause (e) of sub-section (1) of section 6;
(c) the terms and conditions of induction of independent directors to the Board under sub-section (5) of section 6;
(d) the fees and reimbursements in respect of independent directors under sub-section (3), and the term of office and other terms and conditions of service of, the Chairperson, Managing Director, Deputy Managing Directors and other directors of Board under sub-section (5), of section 9;
(e) manner of disclosure of interest by members of Board and of committees under sub-section (1) of section 16;
(f) the threshold for determination of beneficial interest by directors of the Institution or any relative of such director under the Explanation to sub-section (3) of section 18;
(g) conditions subject to which the Institution may enter into a contract or an arrangement under sub-section (1) of section 19;
(h) the parameters on the basis of which the external agency shall review the performance of the Institution under sub-section (2) of section 20;
(i) the rate of fees for Government under section 22;
(j) the form and manner in which the balance-sheet and accounts of the Institution shall be prepared under sub-section (1) of section 25;
(k) any other matter which is to be, or may be, prescribed.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:--
(a) institutions that may hold shares of the Institution under sub-section (3) of section 5;
(b) the manner of election of directors by shareholders under clause (e) of sub-section (1) of section 6;
(c) the terms and conditions of induction of independent directors to the Board under sub-section (5) of section 6;
(d) the fees and reimbursements in respect of independent directors under sub-section (3), and the term of office and other terms and conditions of service of, the Chairperson, Managing Director, Deputy Managing Directors and other directors of Board under sub-section (5), of section 9;
(e) manner of disclosure of interest by members of Board and of committees under sub-section (1) of section 16;
(f) the threshold for determination of beneficial interest by directors of the Institution or any relative of such director under the Explanation to sub-section (3) of section 18;
(g) conditions subject to which the Institution may enter into a contract or an arrangement under sub-section (1) of section 19;
(h) the parameters on the basis of which the external agency shall review the performance of the Institution under sub-section (2) of section 20;
(i) the rate of fees for Government under section 22;
(j) the form and manner in which the balance-sheet and accounts of the Institution shall be prepared under sub-section (1) of section 25;
(k) any other matter which is to be, or may be, prescribed.
Section 32 Powers of Board to make regulations. 1 docs
(1) The Board may, with the previous approval of the Central Government and in consultation with the Reserve Bank, by notification, make regulations not inconsistent with the provisions of this Act to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:--
(a) the salaries and allowances payable to the Managing Director and Deputy Managing Directors under sub-section (4) of section 9;
(b) the times, places and rules of procedure in regard to the transaction of business of the Board under sub-section (1) of section 13;
(c) the times, places and rules of procedure in regard to the transaction of business of the committees and their functions under sub-section (5) of section 15;
(d) amount for transactions under the proviso to sub-section (1) of section 19;
(e) the terms and other conditions of service of the officers and employees of the Institution under sub-section (2) and the terms and conditions of deputation under sub-section (4), of section 30;
(f) the mechanism under sub-section (1) of section 39 for the purpose of determining the penalties specified under sub-section (5) of section 16 and sub-section (5) of section 19;
(g) any other matter which is to be, or may be, specified by regulations.
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:--
(a) the salaries and allowances payable to the Managing Director and Deputy Managing Directors under sub-section (4) of section 9;
(b) the times, places and rules of procedure in regard to the transaction of business of the Board under sub-section (1) of section 13;
(c) the times, places and rules of procedure in regard to the transaction of business of the committees and their functions under sub-section (5) of section 15;
(d) amount for transactions under the proviso to sub-section (1) of section 19;
(e) the terms and other conditions of service of the officers and employees of the Institution under sub-section (2) and the terms and conditions of deputation under sub-section (4), of section 30;
(f) the mechanism under sub-section (1) of section 39 for the purpose of determining the penalties specified under sub-section (5) of section 16 and sub-section (5) of section 19;
(g) any other matter which is to be, or may be, specified by regulations.
Section 33 Rules and regulations to be laid before Parliament.
Every rule and every regulation made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or regulation or both Houses agree that the rule or regulation should not be made, the rule or regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation.
Section 34 Protection of action taken in good faith.
No suit, prosecution or other legal proceedings shall lie against the Institution or its Chairperson or other directors, employees or officers for anything which is done in good faith or intended to be done under this Act, or the rules or the regulations made thereunder, including in respect of assets created or transferred to the Institution.
Section 35 Sanction for enquiry, inquiry, investigation and prosecution.
(1) No investigation agency, including but not limited to Police, Central Bureau of Investigation, Serious Fraud Investigation Office, Directorate of Enforcement and such other agencies, shall conduct any enquiry or inquiry or investigation into any offence alleged to have been committed under any law, in relation to any recommendation made or decision taken by the Chairperson or other directors, employees or officers of the Institution in discharge of his official functions or duties, without the previous approval of--
(a) the Central Government, where the offence is alleged have to been committed by the Chairperson or other directors; or
(b) the Managing Director, where the offence is alleged to have been committed by an employee or officer of the Institution:
Provided that no such approval shall be necessary for cases involving arrest of a person on the spot on the charge of accepting or attempting to accept any undue advantage for himself or for any other person:
Provided further that the Central Government or the Managing Director, as the case may be, shall convey its decision within a period of three months, and such period may, for reasons to be recorded in writing by the Central Government or the Managing Director, as the case may be, be extended by a further period of one month:
Provided also that failure of the Central Government or the Managing Director to convey its decision under this sub-section within the time specified under the second proviso shall not be considered as deemed approval for initiation of any enquiry or inquiry or investigation.
Explanation.--For the purposes of this sub-section, the expression "undue advantage" shall have the meaning as assigned to it under the Prevention of Corruption Act, 1988 (49 of 1988).
(2) No court shall take cognizance of an offence punishable under any law alleged to have been committed by the Chairperson or other directors, employees or officers of the Institution for which a sanction to conduct any enquiry or inquiry or investigation was granted under sub-section (1), except with the previous sanction of--
(a) the Central Government, where the offence is alleged to be committed by the Chairperson or other directors; or
(b) of the Managing Director, where the offence is alleged to be committed by an employee or officer of the Institution:
Provided that the Central Government or the Managing Director shall, after the receipt of the proposal requiring sanction for prosecution under this sub-section, endeavour to convey the decision on such proposal within a period of three months from the date of its receipt:
Provided further that in case where, for the purpose of grant of sanction for prosecution, legal consultation is required, such period may, for the reasons to be recorded in writing, be extended by a further period of one month:
Provided also that failure of the Central Government or the Managing Director to convey its decision under this sub-section within the time specified shall not be considered as deemed approval for the initiation of prosecution.
(a) the Central Government, where the offence is alleged have to been committed by the Chairperson or other directors; or
(b) the Managing Director, where the offence is alleged to have been committed by an employee or officer of the Institution:
Provided that no such approval shall be necessary for cases involving arrest of a person on the spot on the charge of accepting or attempting to accept any undue advantage for himself or for any other person:
Provided further that the Central Government or the Managing Director, as the case may be, shall convey its decision within a period of three months, and such period may, for reasons to be recorded in writing by the Central Government or the Managing Director, as the case may be, be extended by a further period of one month:
Provided also that failure of the Central Government or the Managing Director to convey its decision under this sub-section within the time specified under the second proviso shall not be considered as deemed approval for initiation of any enquiry or inquiry or investigation.
Explanation.--For the purposes of this sub-section, the expression "undue advantage" shall have the meaning as assigned to it under the Prevention of Corruption Act, 1988 (49 of 1988).
(2) No court shall take cognizance of an offence punishable under any law alleged to have been committed by the Chairperson or other directors, employees or officers of the Institution for which a sanction to conduct any enquiry or inquiry or investigation was granted under sub-section (1), except with the previous sanction of--
(a) the Central Government, where the offence is alleged to be committed by the Chairperson or other directors; or
(b) of the Managing Director, where the offence is alleged to be committed by an employee or officer of the Institution:
Provided that the Central Government or the Managing Director shall, after the receipt of the proposal requiring sanction for prosecution under this sub-section, endeavour to convey the decision on such proposal within a period of three months from the date of its receipt:
Provided further that in case where, for the purpose of grant of sanction for prosecution, legal consultation is required, such period may, for the reasons to be recorded in writing, be extended by a further period of one month:
Provided also that failure of the Central Government or the Managing Director to convey its decision under this sub-section within the time specified shall not be considered as deemed approval for the initiation of prosecution.
Section 36 Appointment of directors by Institution to prevail.
(1) Where any arrangement entered into by the Institution with a borrowing entity while granting loans and advances provides for the appointment or nomination by the Institution of one or more directors of such entity, such provision and any appointment of directors made in pursuance thereof shall be valid and effective notwithstanding anything to the contrary contained in the Companies Act, 2013 (18 of 2013), or in any other law for the time being in force or in the memorandum and articles of association or any other instrument relating to the entity, and any provision regarding share qualification, age limit, number of directorships, removal from office of directors and such like conditions contained in any such law or instrument aforesaid, shall not apply to any director appointed by the Institution in pursuance of the arrangement as aforesaid.
(2) Any director appointed as aforesaid shall---
(a) be deemed to be an independent director under the Companies Act, 2013 (18 of 2013) for the purpose of immunities available to independent directors;
(b) hold office during the pleasure of the Institution and may be removed or substituted by any person by order in writing of the Institution;
(c) not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in good faith in the discharge of his duties as a director or anything in relation thereto;
(d) not be liable to retirement by rotation and shall not be taken into account for computing the number of directors liable to such retirement.
(2) Any director appointed as aforesaid shall---
(a) be deemed to be an independent director under the Companies Act, 2013 (18 of 2013) for the purpose of immunities available to independent directors;
(b) hold office during the pleasure of the Institution and may be removed or substituted by any person by order in writing of the Institution;
(c) not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in good faith in the discharge of his duties as a director or anything in relation thereto;
(d) not be liable to retirement by rotation and shall not be taken into account for computing the number of directors liable to such retirement.
Section 37 Validity of loan or advance not to be questioned.
(1) Notwithstanding anything to the contrary contained in any other law for the time being in force, the validity of any loan or advance granted by the Institution in pursuance of the provisions of this Act shall not be called in question merely on the ground of non-compliance with the requirements of such other law as aforesaid or of any resolution, contract, memorandum, articles of association or other instrument.
(2) Nothing in this section shall enable any company to obtain any loan or advance where the instrument relating to the constitution of such company does not empower such company to do so.
(2) Nothing in this section shall enable any company to obtain any loan or advance where the instrument relating to the constitution of such company does not empower such company to do so.
Section 38 Obligations as to fidelity and secrecy.
(1) The Institution shall not, except as otherwise required by this Act or by any other law, divulge any information relating to, or to the affairs of, its constituents except in circumstances in which it is, in accordance with the law or practice and usage customary among bankers, necessary or appropriate for the Institution to divulge such information.
(2) Every director, member of a committee, auditor, officer or other employee of the Institution or of the Reserve Bank, whose services are utilised by the Institution under the provisions of this Act shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the First Schedule.
(2) Every director, member of a committee, auditor, officer or other employee of the Institution or of the Reserve Bank, whose services are utilised by the Institution under the provisions of this Act shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the First Schedule.
Section 39 Adjudication.
(1) The Board shall make regulations for setting up a mechanism for the purpose of determining the penalties specified under sub-section (5) of section 16 and sub-section (5) of section 19.
(2) The regulations shall provide for a reasonable opportunity of being heard to the director or an employee against whom a complaint is made for violating the provisions of section 16 or section 19, as the case may be, and a right to prefer an appeal against any order imposing the penalty.
(2) The regulations shall provide for a reasonable opportunity of being heard to the director or an employee against whom a complaint is made for violating the provisions of section 16 or section 19, as the case may be, and a right to prefer an appeal against any order imposing the penalty.
Section 40 Indemnity of directors.
(1) Every director shall be indemnified by the Institution against all losses and expenses incurred by him in, or in relation to, the discharge of his duties, except such as are caused by his own wilful act or default.
(2) A director shall not be responsible for any other director or for any officer or other employee of the Institution or for any loss or expenses resulting to the Institution from the insufficiency or deficiency of the value of, or title to, any property or security acquired or taken on behalf of the Institution or the insolvency or wrongful act of any debtor or any person under obligation to the Institution or anything done in good faith in the execution of the duties of his office or in relation thereto.
(2) A director shall not be responsible for any other director or for any officer or other employee of the Institution or for any loss or expenses resulting to the Institution from the insufficiency or deficiency of the value of, or title to, any property or security acquired or taken on behalf of the Institution or the insolvency or wrongful act of any debtor or any person under obligation to the Institution or anything done in good faith in the execution of the duties of his office or in relation thereto.