Archive · 19 Sep 2025
Kamath: Banks Out, Capital Markets In for Infrastructure
K.V. Kamath, a top banker, says banks are no longer the main source of money for building roads and other big projects.
He believes that capital markets, like mutual funds and insurance companies, are better suited for this.
Banks can't lend for very long because they have short-term obligations, which creates a mismatch.
Kamath thinks India needs to focus on strengthening existing financial institutions rather than creating new ones to support these projects.
K V Kamath says banks' role in infrastructure funding is ending.
Capital markets, mutual funds, and insurance companies are better suited for long-term investment.
Banks have short-term liabilities limiting long-term infrastructure loans.
Infrastructure firms' defaults have fallen, but bank credit growth has slowed.
Existing development finance institutions (DFIs) need strengthening.
- Who
- K V Kamath
- What
- Stated banks' era in infrastructure funding is over
- When
- Not explicitly mentioned, but recent
- Where
- Not explicitly mentioned, but India
- Why
- Banks face limitations; capital markets are better suited
Traditional Funding
New Funding Models
Primary Source
Traditional Funding
Banks were the traditional source of long-term infrastructure funding.
New Funding Models
Capital markets are now becoming the primary source of infrastructure funding.
Suitability for funding
Traditional Funding
Banks face challenges due to maturity mismatch and other structural constraints
New Funding Models
Capital markets, mutual funds, pension funds, and insurance companies, are inherently better suited for long-duration investment.
- Speaker
- K V Kamath
- Position
- Chairman, National Bank for Financing Infrastructure and Development
- Topic
- Infrastructure Funding Shift
- New Sources
- Capital markets, mutual funds, pension funds, insurance companies
- Banks' Role
- Diminishing
- DFIs
- Need strengthening, not multiplication
Sources
Capital markets to power India’s infrastructure growth: SEBI Chairman
Accelerate asset monetisation across sectors to boost infrastructure creation, says SEBI Chairman
SEBI chief urges faster infra asset monetisation, broader investor base
Asset monetisation is the key to unlock infrastructure financing: SEBI Chairman
Accelerate asset monetisation in rly, roads: Sebi chief
