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Development banks are financial institutions that provide long-term loans and assistance to promote social and economic development in their member countries. Their main goals are reducing poverty and improving people's lives. They help develop industries, infrastructure, and other key sectors to accelerate economic growth. Some examples of development banks in India include IFCI, IDBI, and ICICI, which provide financing and support services to industries.

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40 views

Mfi 3 Unit Already

Development banks are financial institutions that provide long-term loans and assistance to promote social and economic development in their member countries. Their main goals are reducing poverty and improving people's lives. They help develop industries, infrastructure, and other key sectors to accelerate economic growth. Some examples of development banks in India include IFCI, IDBI, and ICICI, which provide financing and support services to industries.

Uploaded by

Soniya Omir Vijan
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© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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WHAT IS DEVELOPMENT BANKS/ WHAT ARE DEVELOPMENTAL FINANCIAL INSTITUTIONS

A development bank is a polygonal development finance institution devoted to improving the social and monetary development of its associate nations. Its main emphasis is the welfare of the people .For example the asian development banks goal is to decrease poverty in asia and the pacific. It helps improve the value of peoples lives by providing loans and specific support for a board variety of development activities. Development banks are financial agencies that provide medium and long term financial assistance and act as catalyst agents in promoting balanced development of the country. They are engaged in promotion and development of industry, agriculture and other key sectors . They also provide development services that can aid in the accelerated growth of an economy.

OBJECTIVES OF DEVELOPMENT BANKS


To serve as an agent of development in various sectors viz. industry, agriculture and international trade. To accelerate the growth of the economy. To allocate resources to high priority areas. To foster rapid industrialization particularly in the private sector, so as to provide employment opportunities as well as higher production. To develop entrepreneurial skills. To promote the development of rural areas. To finance housing, small scale industries, infrastructure and social utilities.

FUNCTIONS OF A DEVELOPMENT BANK


Increase loans and equity investments to its developing associate countries for their monetary and social development. Provides technical help for the planning and implementation of development projects and programs and for advisory services. Promotes and facilitates speculation of public and private capital for growth and development. Responds to requests for assistance in coordinating growth and policies and plans of its increasing member countries.

ROLES OF DEVELOPMENT BANKS IN FINANCIAL SYSTEM


Providing funds Infrastructural facilities Promotional activities Development in backward areas Employment generation Accelerate industrialisation

DEVELOPMENT BANKS IN INDIA / DIFFERNT TYPES OF DEVELOPMENTAL FINANCIAL INSTITUTIONS


IFCI IDBI ICICI

INDUSTRIAL FINANCE CORPORATION OF INDIA LIMITED(IFCI)


The government of India set up the industrial finance corporation of India in July 1948. It was the first institution in the financial sector to be converted into a public limited company on July 1, 1993. It was set up to provide institutional credit to medium and large industries. Management of IFCI has 12 directors in which 4 are nominated by the IDBI.

OBJECTIVES OF IFCI
Promoted by new entrepreneurs Based on indigenous technology Which would result in substitution of imports Providing input for increasing agricultural products Guarantee loans and deferred payments Assist projects under co-operatives and in backward areas The period could be as long as 25 years and should not exceed that period Underwrite and directly subscribe to shares and debentures issued by companies Assist in setting up new projects as well as in modernisation of existing industries

FUNCTIONS OF IFCI
Granting loans and advances for the establishment , expansion, diversification and modernisation of industries in corporate and co-operative sectors Guaranteeing loans raised by industrial concerns in the capital market , both in rupees and foreign currencies Subscribing and underwriting the issue of shares and debentures by industries. Such investment can be held up to 7 years Guaranteeing credit purchase of capital goods, imported as well as purchased with in the country Providing assistance under the soft loans schemes to selected industries such as cement , cotton textiles, jute, engineering goods etc. Providing technical , legal, marketing and administrative assistance to any industrial concerns for the promotion , management and expansion of the industrial concern Providing equipment to the existing industrial concerns on lease under its equipment leasing scheme Rendering merchant banking services to industrial concerns

INDUSTRIAL DEVELOPMENT BANK OF INDIA (IDBI)


The industrial development bank of india (IDBI) was established on july 1 1964 under the act of parliament as a wholly owned subsidiary of the Reserve Bank of India. In 16 febuary 1976 the ownership of IDBI was transferred to the government of India and it was made the principal financial institution for coordinating the activities of institutions engaged in financing , promoting, and developing industry in the country.

THE PRINCIPAL SOURCE OF FUNDS OF IDBI


Share capital and reserves Borrowing from government of India and RBI Market borrowing by way of bonds Deposits and other borrowings Repayment of past assistance by borrowers Foreign currency borrowing form world banks Asian development banks and international markets

OBJECTIVES AND FUNCTIONS


Planning, promoting, developing industries Co-ordinating the working in institutions engaged in financing Undertaking market and investment research Providing technical and administrative assistance Subsidiaries

INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA (ICICI)


ICICI is an Indian diversified financial services company headquartered in Mumbai, Maharahtra. It is the second largest bank in india by assets and third largest by market capitalization It offers wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries in the areas of banking , life and non life insurance, venture capital and asset management The bank has a network of 2630 branches and 8003 ATMs in India and has a presence in 19 countries including India.

OBJECTIVES OF ICICI

Assisting in creation Expansion Modernisation of enterprise Encouraging and promoting the participation private capital Encouraging and promoting private ownership

FUNCTIONS OF ICICI

Assistance to industries Provision of foreign currency loans Merchant banking Letter of credit Project promotion Housing loans Leasing operations

UNIT TRUST OF INDIA AND MUTUAL FUNDS


UNIT TRUST OF INDIA is Indias first mutual fund organisation . It is the single largest mutual fund in india which came into existence with the enactment of UTI Act in 1964. UTI was set up as a trust without ownership capital and with an independent board of trustees. The board of trustees manages the affairs and business of UTI UTI has a wide distribution network of 54 branch offices, 266 chief representatives and about 67000 agents UTI manages 72 schemes and has an investor base of 20.02 million investors UTI set up 183 collection centres to serve investors It has 57 franchisee offices which accept applications and distribute certificates to unit holders.

LIFE INSURANCE CORPORATION


There has been life insurance business in India since 1818 In 1956 the life insurance business of all companies as mentioned was nationalised and a single monolithic organisation, the Life Insurance Corporation of India (LIC)

OBJECTIVES OF LIC
To spread life insurance and provide life insurance protection to the masses at reasonable cost To mobilise peoples savings through insurance-linked saving schemes To invest the funds to serve the best intrest of both policy holders and the nation To conduct business with maximum economy, always remembering that the money belongs to the policy holders To act as trustees of the policy holders and protect their individual and collective interests To innovate and adapt to meet the changing life insurance needs of the community To involve all the people working in the corporation to ensure efficient and courteous service to insured public To promote a sense of pride and job satisfaction through dedicated service to achieve the corporate objective

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