National Level Development Banks

(Industrial sector)

National Level

Industrial

Development Banks

IDBI

IFCI

ICICISIDBI

IIBI

Industrial Development Bank of India established in July 1964 by the Govt. of

India To provide financial facilities for

development of industrial units in India.

The Head office of IDBI is located in Mumbai. It is currently 10th largest development bank in

the world in terms of reach, with 3350 ATMs, 1853 branches, including one overseas branch at Dubai, and 1382 centres.

IDBI functions as an apex bank for the development banks engaged in industrial financing and insurance.

IFCIICICI

IRCI

LICUTI

GIC GIC

UTILIC

SFCs

ICICI

IFCI

MANAGEMENT of IDBI 22 members Board of Directors nominated

by the Central Government. Shri Kishor Kharat is MD and CEO of IDBI.

FUNCTIONS of IDBI Direct financial assistance to industrial units Indirect financial assistance to industrial

enterprises As an Apex body Assistance to Backward areas Rediscounting/ discounting bills of exchange

Help entrepreneurs in identifying economically viable project and provided technical assistance

Carries out research work by collecting information about market .

Provides venture capital for new industries Helps in entrepreneurial development through

training programme . Provide consultancy services

SOURCES OF FUNDS Authorised capital rs.3000 crores Issued share capital rs.2058 crores. Its shares are listed in BSE,NSE. IDBI can build its financial resources through shares,

debentures, deposits from companies, borrowings from RBI and the Govt. of India

Diversification of Activities of IDBISince 1990, IDBI has set up number of institutes, including: Small Industries Development Bank of India in 1990. IDBI Investment Management Company (IIMCO)in 1994. IDBI Capital Market Services Ltd. (ICMS)in 1995. IDBI bank Ltd.

IDBI has supported for establishment of National Stock Exchange of India , Infrastructure Development Financial Corp. (IDFC), SEBI, EXIM Bank, Entrepreneurial Development Institute of India, Technical Consultancy Organization (TCO)

PROBLEMS WITH IDBI IDBI is facing big problem of NPAs. In 2004, RBI incorporated IDBI as scheduled

Bank. In July 2016 FM declared there is a chance of

dilution of GOI stake in IDBI to below 50%.

IFCI is an Indian government owned development bank to cater to the long-term finance needs of the industrial sector.

It was the first DFI established by the Indian government after independence.

The Government established the Industrial Finance Corporation of India (IFCI) on 1 July 1948. The IFCI was established to provided access to low-cost funds.

MANAGEMENT of IFCI Chairman is appointed by the Government of

India, for a period of 3 years. 12 directors, nominated by the IDBI,

scheduled banks, cooperative banks, insurance trusts .

FUNCTIONS OF IFCI Soft Loan Assistance Entrepreneur Development Industrial Development in Backward

Areas Subsidised Consultancy

IFCI has provided assistance to all types of industries . 2/3 of assistance was given to 5 major industries and they are:• Cement,• Cotton, Artificial yarn,• Mining industry,• Hotel industry,• Generation or distribution of power

electricity.

PROBLEMS with IFCI The rate of interest which the corporation

charged was extremely high. There was a great delay in sanctioning loans

and in making the amount of the loans available.

The ‘corporation’s insistence on the personal guarantee of managing directors in addition to the mortgage of property was considered wrong.

ICICI Industrial credit and investment corp. of

India. In 1955, as a joint-venture of the World

Bank, India's public-sector banks set up ICICI to provide project financing to Indian industry.

ICICI Bank headquartered in Mumbai, the second largest bank in India in

terms of assets ICICI does not exist any more as a

development financial institution , it is a banking company.

Objectives of ICICI To provide loans to industrial projects in

private sector. To stimulate the promotion of new industries. To assist the expansion and modernization of

existing industries. To provide Technical and managerial aid to

increase production

FUNCTIONS OF ICICI Providing medium and long term loans for

starting private production units Helping in raising the investments by Indians

and foreigners in the private sector production units.

Providing technical and managerial assistance.

Guaranteeing the loans of private sector units.

Providing capital to developmental projects in the private sector

Participating in equity capital and in debentures. Underwriting new issues of shares and

debentures and providing foreign currency loan to such

units. Establishing strong relations with the foreign

financial institutions

o SIDBI is the wholly owned subsidiary of IDBI.

o engaged in meeting financial needs of small scale industrial units.

o The decision to set up SIDBI was announced in the budget of 1988-89 and it actually started working form 2nd April 1990

It functions as an apex institution in the area of SSI finance.

Mr. Susil Muhnot, chairman and managing director of SIDBI.

FUNCTION of SIDBI Supplement efforts of existing

institutions to help financing SSI. Direct lending to SSI sector. Refinancing primary lending

organizations to help them to finance SSI sector.

Bill rediscounting and refinance of bills. Finance export oriented units. Extending seed capital / soft loans to

entrepreneurs. Providing export credit to the SSIs, small

entrepreneurs in the purchase of assets, raw material etc.

Questions

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