Scribd
Upload
51 views

Development Banks

About development banks on India. The functions and objectives are described. Also criticism is included. Different development banks are explained in this.

Uploaded by

Lakshmi M R
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
51 views

Development Banks

About development banks on India. The functions and objectives are described. Also criticism is included. Different development banks are explained in this.

Uploaded by

Lakshmi M R
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 17

Development Bank

Contents
• Introduction
• Evolution of development banks.
• Objectives .
• Roles of development banks .
• Function's of development banks .
• Types of development banks in India .
• Agricultural development banks .
• Housing development banks .
• Industrial development banks .
• Export - Import development banks .
• Conclusion: Present stage of development bank in India.
Introduction : What is meant by 
development banks?
• They are specialised financial institutions.
• Lend finance in subsidice interest rate.
• Provide medium and long term finance to
industrial and agricultural sector.
• Provide finance to both public and private
sectors.
Types of development banks in India

Agricultural Industrial
development banks development banks
Housing development Export-Import
banks development banks
Agricultural development banks
• To provide financial service for the
unreached poor in rural areas through
various Micro Finance Innovations in a
cost effective and sustainable manner .
• Eg : National Bank for Agriculture &
Rural Development (NBARD) :
• Set up year : 1982
• Committee recommend : Mr. B. Sivaraman .
• Owned by : Government of India & RBI .
• Headquarter : Mumbai , Maharashtra .
Housing development banks
• For developing a market - oriented
housing finance system in the
Country .
• Eg : National Housing Bank (NBH) :
• Set up year : 1988 ( under the National
Housing Bank Act, 1987) .
• Owned by : RBI .
• Headquarter : New Delhi .
Industrial development banks
• To contribute to the process of economic growth ,
employment generation and balanced regional development .
• Eg : (1) Small Industries Development Bank of India ( SIDBI ) .
• It is for the growth of Micro , Smart and Medium
Enterprises ( MSME ) sector .
• Set up year : 1989 .
• Owned by : Government of India ( earlier by IDBI ) .
• Headquarter : Lucknow , Uttar Pradesh .
• (2) The Industrial Credit and Investment Corporation of
India ( ICICI ) :
• First Indian Bank to launch on New York Stock
Exchange .
• India's second largest bank classified as SIB (
Systemically Important Bank ) .
• It is a private bank .
• Set up year in India : 1995 .
Exp t - Imp t development banks
• Enhance exp ts and catalyst in e promotion of cross b der trade
and investment .
• Promote Sma and Medium Enterprises (SME) finances .
• Eg : Exim Bank :
• Set up year : 1982 (under Exp t - Imp t Bank of India
Act , 1981 .)
• Owned by : Government of India .
• Headquarter : Mumbai , Maharashtra .
Conclusion : Present stage of development
bank in India
• Refoms of financial sect from 1998 has ought significant changes in
development banks like :
• Deregulation of interest rate .
• Emergence of disintermediation process out of a liberalised capital market .
• Participation of banks in project financing .
• Development bank intum making f ays into w king capital financing .

• Wi ese ref ms e RBI of India prepared a discussion paper in


January 1999 to address various issues concerning e Universaisation of
banks and elimination of e specific functional role of specialised financial
institutions . One of e maj issues addressed in e discussion paper
relates to conversion of development banks ei er into Universal banks
NBFI's .
Universal Banks
• It is a combination of Commercial banking , Investment
banking , Development banking , Insurance and many
other financial activities . It is a place where all
financial products are available under one roof .
• So, a Universal bank is a bank which offers commercial
bank function's plus other functions such as Merchant
Banking, Mutual Funds, Factoring, Credit Cards,
Housing finance, Auto loans, Retail loans, Insurance,etc.
Merits & Demerits of Commercial banks

• Merits:
• Greater economic efficiency in the form of lower coast,
higher output,better product .

• Demerits:
• Changes of gaining monopoly,which could have
undesirable consequences on economic efficiency .
• Conflict of interest.
Non Banking Financial Institutions

• A non-banking financial institution is a financial


institution that does not have a full banking licence or
is not supervised by a national or international
banking regulatory agencies
• Non Banking financial institutions are financial
institutions that provide banking services but do not
hold a banking licence . These institutions are not
allowed to take deposits from the public .
Non Banking Financial Institutions(NBFI)

• An institution which carried on as it's business or part of its business the


following activities:
• Financing .
• Acquisitionof securities .
• Hire purchase .
• Insurance .
• Chit fund .
• Mutual benefit company .
• But does not include institutions which carried on as it's principle business:
• Agricultural operations .
• Industrial activities .
• Scale and purchase of goods .
• Providing of services .
• Purchase, sale and construction of immoveable properties .

You might also like