In exercise of the powers conferred by clause c of sub section 1 of section 2 of the National Bank for Financing Infrastructure and Development Act

## Policy Analysis Report: Notification Regarding National Bank for Financing Infrastructure and Development Act, 2021 **1. Executive Summary:** This report analyzes a notification (S.O. 1658E) issued by the Ministry of Finance, Department of Financial Services, Government of India, effective April 19, 2021. This notification pertains to the National Bank for Financing Infrastructure and Development (NaBFID) Act, 2021. It designates the Banks Board Bureau (BBB) as the recommending body for the appointment of Managing Director and Deputy Managing Directors, as well as for the removal of directors under specific sections of the NaBFID Act. The key finding is the clarification of the process for leadership selection and director removal within NaBFID, centralizing this responsibility with the established Banks Board Bureau. **2. Introduction:** This report aims to provide a concise overview and analysis of the Government of India, Ministry of Finance's notification S.O. 1658E, based solely on the text provided in the notification document. This analysis will cover the notification's objectives, key provisions, affected stakeholders, and likely impacts. **3. Policy Overview:** * This notification relates to the National Bank for Financing Infrastructure and Development Act, 2021 (17 of 2021). * **Core Objective(s):** Based on the provided text, the core objective is to establish a clear and defined mechanism for recommending candidates for appointment of Managing Director and Deputy Managing Directors and for the removal of directors within the framework of the NaBFID Act, 2021. **4. Background and Rationale:** * **New Policy:** The NaBFID Act establishes a new development finance institution. Therefore, the accompanying notification is likely intended to provide clarity and establish operational procedures for critical aspects of the new institution's governance, specifically the selection and potential removal of its leadership. Without a designated body, the process would be unclear, potentially hindering the effective establishment and operation of NaBFID. **5. Key Provisions / Changes:** * **New Policy:** The notification designates the Banks Board Bureau (BBB), described as an autonomous body of the Government of India, as the entity responsible for the following: * Recommending candidates for the appointment of Managing Director and Deputy Managing Directors under subsection 1 of section 6 of the NaBFID Act, 2021. * Recommending the removal of a director under clause ii of subsection 1 of section 11 of the NaBFID Act, 2021. **6. Target Audience and Stakeholders:** Based on the text, the primary stakeholders directly affected by this notification include: * The National Bank for Financing Infrastructure and Development (NaBFID). * The Banks Board Bureau (BBB). * Potential candidates for the positions of Managing Director and Deputy Managing Directors of NaBFID. * Directors of NaBFID (in the context of potential removal). * The Government of India, specifically the Ministry of Finance. **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** The key responsible bodies are the Ministry of Finance (issuing the notification) and the Banks Board Bureau (executing the recommendation process for appointments and removals). * **Timelines or Procedures:** The text does not specify any timelines or detailed procedures beyond the broad responsibilities assigned to the BBB. It's implied that the BBB will develop and follow its own internal procedures for candidate evaluation and recommendation, aligning with the existing provisions of the NaBFID Act. **8. Expected Outcomes / Impact of Changes:** * **New Policy:** The likely intended outcomes include: * A transparent and merit-based selection process for the leadership of NaBFID. * Enhanced governance and accountability within NaBFID through a defined process for director removal. * Increased confidence among stakeholders (investors, borrowers, and the public) in the credibility and effectiveness of NaBFID. * Streamlined establishment and operationalization of NaBFID by clarifying key governance processes. **9. Conclusion:** The notification S.O. 1658E is a crucial step in the operationalization of the National Bank for Financing Infrastructure and Development Act, 2021. By designating the Banks Board Bureau as the recommending body for key leadership appointments and director removals, the notification establishes a framework for transparent and accountable governance within NaBFID. This will likely contribute to the institution's credibility and effectiveness in fulfilling its mandate of promoting infrastructure development in India. The limited scope of the text restricts the extent of the analysis, but it clearly highlights the importance of this notification in establishing the foundational structure of the new development bank.

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