NaBFID Analyst / Officer cheat sheet

DFI mandate: countercyclical long-tenor lending where commercial banks face maturity mismatch; NaBFID is a statutory DFI under the NaBFID Act, 2021, regulated by RBI as an All India Financial Institution (AIFI).

NaBFID permitted activities: lending and investing in infrastructure projects, refinancing bank/NBFC infrastructure loans, credit enhancement, takeout finance, and acting as a financial institution for bond/loan syndication.

Takeout finance: DFI commits to purchase a specified portion of a lender's loan after a defined moratorium, freeing bank capital and extending effective tenor; priced on a spread over the underlying loan rate.

Credit enhancement: partial guarantee or letter of comfort raising a borrower's rating, reducing coupon; DFI charges a guarantee fee and holds contingent liability until the guarantee expires.

Infrastructure sub-sectors typically eligible: energy (generation, transmission, distribution, renewables), transport (roads, ports, airports, rail), water and sanitation, telecom, social and commercial infrastructure as notified.

Project lifecycle: concept and feasibility, DPR preparation, financial close, construction, commissioning, operations, and asset recycling or refinance; appraisal intensity peaks before financial close.

Harmonised Master List of Infrastructure sub-sectors is notified by the Government and defines eligibility for long-tenor infrastructure lending and related tax or regulatory concessions.

DFI funding mix: paid-up capital from Government, bonds (including infrastructure bonds), multilateral lines of credit, and refinance from RBI or other institutions; cost of funds drives lending spread.

Tripartite agreement among DFI, borrower, and Government (or promoter) is common in infrastructure to secure priority in cash-flow allocation and enforce step-in rights.

Current ratio = current assets / current liabilities; quick ratio excludes inventory; both are near-meaningless for infrastructure SPVs whose assets are long-lived and cash-flow driven.

DSCR = (PAT + depreciation + interest on term loans + other non-cash charges) / (interest + scheduled principal repayment); minimum acceptable DSCR for infrastructure term loans is typically 1.20x-1.50x.

Interest coverage ratio = EBIT / interest expense; a declining trend signals rising leverage or margin compression even if DSCR is stable.

Debt-equity ratio = total debt / net worth; project SPVs are typically capped at 70:30 to 80:20 debt-equity at financial close, with sponsor contribution upfront.

NPV = sum of CFt / (1+r)^t minus initial outlay; IRR is the discount rate at which NPV equals zero; a project is viable when IRR exceeds WACC.

WACC = (E/V) x Ke + (D/V) x Kd x (1 - tax rate); Ke from CAPM = risk-free rate + beta x equity risk premium; infrastructure betas are low but project-specific risk is high.

EBITDA margin = EBITDA / revenue; for regulated utilities, returns are often computed on a regulated asset base, so margin analysis must be paired with RAB and tariff-order review.

Free cash flow to firm = EBIT x (1 - tax) + depreciation - capex - change in working capital; negative FCFF during construction is expected and funded by debt drawdown.

Cash flow waterfall: revenue, O&M, debt service reserve, senior debt service, subordinated debt, then equity distribution; analysis must test each tier's coverage separately.

Non-recourse versus limited recourse: lender recourse is confined to project assets and cash flows; sponsor support (completion guarantee, DSRA) is the main mitigant.

Appraisal pillars: promoter and sponsor track record, technical feasibility, market and offtake, financial viability, legal and regulatory clearances, and environmental and social safeguards.

Techno-economic viability study checks DPR assumptions: capital cost per unit, construction schedule, capacity utilisation ramp-up, tariff or offtake price, and O&M cost escalation.

Sensitivity analysis: vary tariff, demand, capex overrun, interest rate, and delay by adverse scenarios (commonly 10-20%) and confirm DSCR stays above the covenant threshold.

Security package: first charge on project assets, assignment of project agreements, escrow of project cash flows, pledge of shares, DSRA, and sponsor guarantees.

Covenants: DSCR lock-in (e.g., distribution lock-in below 1.20x), debt service reserve of 1-2 quarters, capex overrun funding undertaking, and change-in-law protection.

Due diligence includes title and land documents, environmental clearance, concession agreement review, offtake agreement bankability, and insurance adequacy.

Credit rating mapping: internal rating models weight financial risk, business risk, and project risk; PD and LGD feed expected loss = PD x LGD x EAD.

Structured finance tools: takeout finance, securitisation of receivables, bond refinancing, and credit enhancement to lower cost of borrowing at operating stage.

Credit risk components: PD, LGD, EAD; expected loss = PD x LGD x EAD; unexpected loss is covered by economic capital.

Concentration risk limits: sector caps, single-borrower and group exposure ceilings, and unsecured exposure limits, monitored against capital and loan book.

Liquidity risk: asset-liability mismatch (ALM) analysis in time buckets; DFIs fund long assets with bonds, so refinancing and rollover risk are central.

Market risk: interest rate risk measured by duration gap and DV01; fixed-rate lending funded by floating-rate borrowings creates basis risk.

Operational risk: Basel event types (internal fraud, external fraud, employment practices, clients and products, physical damage, business disruption, execution and process).

Project risk categories: construction and completion risk, sponsor risk, offtake and demand risk, regulatory and political risk, currency risk, and force majeure.

Stress testing: scenario shocks to DSCR, default rates, and funding costs; results inform provisioning buffers and capital planning.

Risk mitigation instruments: guarantees, insurance (construction all-risk, business interruption), escrow, DSRA, and step-in rights under concession agreements.

NPA classification: substandard (NPA up to 12 months), doubtful (over 12 months), loss; provisioning per RBI IRAC norms applies to DFI loan books.

NaBFID established under the National Bank for Financing Infrastructure and Development Act, 2021; regulated by RBI as an All India Financial Institution under the RBI Act, 1934.

RBI prudential norms for AIFIs: capital adequacy, income recognition, asset classification, provisioning, exposure norms, and statutory liquidity requirements as notified.

KYC and AML obligations under the PMLA, 2002 and RBI Master Direction on KYC; customer due diligence, beneficial ownership identification, and STR filing to FIU-IND.

SEBI (Issue and Listing of Non-Convertible Securities) Regulations govern bond issuance; LODR applies if listed; ICDR applies to equity capital raising.

Companies Act, 2013 compliance: board composition, audit committee, related party transactions, and CSR obligations where thresholds are met.

Environmental and social compliance: EIA notification under the Environment (Protection) Act, 1986; forest, wildlife, and coastal regulation zone clearances are preconditions for many projects.

Prevention of Corruption Act, 1988 and CVC guidelines apply to public-sector-linked lending; conflict of interest and gift policies are enforced internally.

FEMA and RBI guidelines govern external commercial borrowings, foreign investment, and remittance; DFI foreign currency borrowing requires compliance with ECB norms.

Statutory audit, CAG audit where applicable, and RBI inspection findings drive compliance remediation and board reporting.

Requirement elicitation techniques: stakeholder interviews, workshops, document analysis, observation, and prototyping; each produces different fidelity of requirements.

MoSCoW prioritisation: Must have, Should have, Could have, Won't have; used to scope releases when time is fixed.

Business process modelling uses BPMN swimlanes; as-is and to-be maps expose handoffs, bottlenecks, and control gaps.

User stories follow the format 'As a [role], I want [feature], so that [benefit]', with acceptance criteria in Given-When-Then form.

Stakeholder matrix: power/interest grid classifies stakeholders into manage closely, keep satisfied, keep informed, and monitor.

Cost-benefit analysis for a change initiative: quantify benefits, discount at the hurdle rate, compare NPV and payback; include intangible operational benefits qualitatively.

RACI matrix assigns Responsible, Accountable, Consulted, Informed for each activity; exactly one accountable owner per activity.

Gap analysis compares current-state capability against target-state and outputs a prioritised change backlog with dependencies and risks.

KPIs must be SMART; leading indicators (pipeline conversion, sanction-to-disbursement cycle time) predict lagging outcomes (portfolio yield, NPA ratio).

Loan Management System (LMS) is the system of record for sanctions, disbursements, repayments, and interest accrual; general ledger reconciliation is a key control.

Data warehouse vs data lake: warehouse stores structured, schema-on-write data for reporting; lake stores raw structured and unstructured data with schema-on-read.

ETL versus ELT: ETL transforms before loading; ELT loads raw data and transforms in the warehouse, leveraging cloud compute.

Data quality dimensions: completeness, accuracy, consistency, timeliness, validity, and uniqueness; each needs an owner and a monitoring rule.

Core banking or lending integration uses APIs (REST/JSON) with idempotency keys; middleware handles retries and reconciliation of failed transactions.

Information security triad: confidentiality, integrity, availability; controls include encryption at rest and in transit, MFA, RBAC, and audit logging.

RBI cybersecurity framework for banks and financial institutions mandates a board-approved cyber security policy, SOC monitoring, and incident reporting timelines.

Business continuity: RTO (recovery time objective) and RPO (recovery point objective) define backup and disaster recovery design; DR drills are periodic.

Data privacy under the Digital Personal Data Protection Act, 2023: purpose limitation, consent, data minimisation, and breach notification obligations.