Development financial institution & District investment center

DEVELOPMENT FINANCIAL
INSTITUTIONS
 A financial agencies that provide medium and
long-term financial assistance and engaged in
promotion and development of industry,
agriculture and other key sectors.
 Ex: International Bank for reconstruction and
Development (IBRD) also known as World
Bank & International Monetary Fund (IMF)

INTRODUCTION
Industrial finance is a very complicated
problem. It is of vital importance as development
of any country depends on industrial development
of that country ‘s economy.
Why there is need of finance
1.Long term
2.Medium term
3.Short term

CONTINUE….
 Long term capital is also known as block capital or fixed
capital. it is needed to acquire-fixed and permanent assets
 Medium term capital is required for repairs, replacements,
maintenance of machines and building etc.
 Short term capital is needed for purchase of raw material ,
and to meet day to day expenses

TYPES OF FINANCIAL INSTITUTIONS IN
INDIA
 Term lending
 Refinance institutions
 Investment institutions
 State level institutions

TERM LENDING
A term loan is a monetary loan that is repaid in regular payments
over a set period of time. Term loans usually last between one and ten years, but
may last as long as 30 years in some cases. A term loan usually involves an
unfixed interest rate that will add additional balance to be repaid.
 IFCI
 IDBI
 ICICI
 EXIM

IFCI (INDUSTRIAL FINANCE CORPORATION
OF INDIA)
 It was established in 1948
 First development bank of India
 Objective was to make medium and long term
credits more readily available
 Management
- BOD total 12 members(4 by idbi,2 by center govt,
6 by shareholders)
- -full time chairperson

FUNCTIONS OF IFCI
1) For setting up a new industrial undertaking.
2) For expansion and diversification of existing industrial
undertaking.
3) For renovation and modernization of existing concerns.
4) For meeting the working capital requirements of industrial
concerns in some exceptional cases.
5) Direct financial support (by way of rupee term loans as well as
foreign currency loans) to industrial units for under taking new
projects, expansion, modernization, diversification etc.
6) Subscription and underwriting of public issues of shares and
debentures.

CONTINUE….
Resources of IFCI
 ownership capital
 Issue of shares and bonds
 borrowing from RBI,IDBI AND CENTER
GOVT
 accepting deposits from public, state govt and
local authorities

IDBI (INDUSTRIAL DEVE. BANK OF INDIA)
 Set up in 1964
 It was fully owned subsidiary of RBI but in 1976
delinked from RBI and made as autonomous
body of GOI
 H.O in Mumbai 11 branch offices
 It is managed by a chairman and MD appointed
by central govt, a deputy governor nominated of
RBI, 20 other directors.

FUNCTIONS OF IDBI
 The IDBI has been established to perform the following
functions-
1) To grant loans and advances to IFCI, SFCs or any other
financial institution by way of refinancing of loans granted by
such institutions which are repayable within 25 year.
2) To grant loans and advances to scheduled banks or state co-
operative banks by way of refinancing of loans granted by
such institutions which are repayable in 15 years.

CONTINUE…
3) To discount or re-discount bills of industrial
concerns.
4) To underwrite or to subscribe to shares or debentures
of industrial concerns.
5) To subscribe to or purchase stock, shares, bonds and
debentures of other financial institutions.

CONTINUE..
 With effect from 1 oct,2004 it has renamed as
IDBIL. It has been accepted as a deemed banking co
under banking regulation act. The govt holds the
majority (58.47%) shares of IDBI LTD.
 During last 40 years IDBI has given a qualitative
dimension to the process of industrial development
of the country.

FINANCIAL ASSISTANCE BY IFCI/IDBI
Sanction(crores)
Purpose IFCI IDBI
New projects 15919.6 67498
Expansion /acquisition 6649.2 50627
Rehabilitation 115.7 1415
Modernization 5459.7 12976
Working capital 837 5138

I.C.I.C.I. (INDUSTRIAL CREDIT & INVESTMENT
CORPORATION OF INDIA)
 Established in 1955 As a public ltd co, at the initiative of
world bank
 Authorized capital of 60 crores and issued capital 22 crores
 The objectives of icici are to encourage establishment of
new industries, to help in expansion and modernization,
technical and managerial aid to increase production and
employment.

CONTINUE…
 In October 2001 .BOD Approved ICICI LTD AND ICICI BANK
LTD. With effect from MAY 2002 IT IS SIMPLY ICICI bank .
 ICICI is now the largest bank with total assets of more than 3000
billions
 More than 700 branches and over 2200 ATM spread all over the
country
 It mainly deals in
 Retail banking, wholesale banking, project finance, international
business and special assets mgt

FUNCTIONS OF ICICI
1)It provides long-term and medium-term loans in
rupees and foreign currencies.
2)It underwrites new issues of shares and debentures.
3)It guarantees loans raised by private concerns from
other sources.
4)It provides technical, managerial and
administrative assistance to industrial concerns.


CONTINUE…
ICICI is known for its many firsts.
 it was first Indian organization to listed in New york stock
exchange.
 Foreign financial investor own around 38% shares .
 Technology, strategy, low cost branches innovations are
key reasons of icici success.
 They are the first to introduce mobile banking, on line
financial information, portals to allow accounts and
information on line.
 It was the first to introduce e-commerce.
 It has the largest no of call centers.

EXIM
 Established on1st JAN,1982.
 Authorized capital 1000 crores and paid up is 650
crores.
 Exim bank came into existence when
international finance division of idbi was
transferred to exim bank in 1982.
 Exim started its working from march 1982
 The issued capital is wholly subscribed by center
govt

FUNCTIONS OF EXIM
1) Financing of exports and imports of goods and
services, not only of India but also of the third
world countries;
2) Financing of exports and imports of machinery
and equipment on lease basis;
3) Financing of joint ventures in foreign countries;
4) Providing loans to Indian parties to enable them
to contribute to the share capital of joint ventures
in foreign countries;

CONTINUE…
 The main objective of exim is to provide financial assistance to
exporters and importers. It has to coordinate the working of those
institutions which can promote international trade.
 Management is MD+17 other directors representing
govt,RBI,ECGC,public sector banks
 Resources of EXIM
 -GOI
 -RBI
 -any organization approved by GOI
 TYPES OF ASSISTANCE
 -fund based
 -non fund based

ASSISTANCE BY EXIM
 Fund based
 Pre shipment credit
 Foreign currency
 Post shipment credit
 Deemed exports
 Loans to commercial
banks for bills
discounting
 Finance for consultancy
and technology
 Non fund based
 Guarantees

REFINANCING INSTITUITIONS
 Are those which do not give finance directly but
they create such structure by which the funds are
allocated up to the minimum level.
 N.A.B.A.R.D.
 S.I.D.B.I.
 N.H.B

NABARD-NATIONAL BANK FOR
AGRICULTURE AND RURAL DEVELOPMENT
 Started functioning from 1july 1982
 Set up with an initial capital of 100 crores, now it is 2000
crores fully subscribed by GOI AND RBI.
 H.O IN Mumbai, with 28 regional and 391 district
offices
 It is an apex organization for policies, planning and
operations of agriculture ,SSI ,handicraft and village
industries
 It mainly deals in three types of functions
 credit ,developmental ,regulatory functions

FUNCTIONS OF NABARD
1) Inspection and Supervision of Co-operative Banks and
Regional Rural Banks
2) Development of Women and Children in Rural Area
3) Integrated Rural Development Programme
4) It undertakes monitoring and evaluation of projects
refinanced by it.
4) It promotes research in the fields of rural banking,
agriculture and rural development

SIDBI (SMALL INDUSTRIES DEVLOPMENT
BANK OF INDIA)
 Set up in oct 1989
 Wholly owned subsidiary of IDBI
 It is the principal financial institution for promotion
,financing and development of small scale industries
 In sep 2000 IDBI transferred 51% in favor of banks
and other institutions in the first phase.

 FUNCTIONS OF SIDBI
1) It refinances loans and advances provided by the existing
lending institutions to the small-scale units.
2) It discounts and rediscounts bills arising from sale of
machinery to and manufactured by small-scale industrial
units.
3) It grants direct assistance and refinance loans extended by
primary lending institutions for financing exports of
products manufactured by small-scale units.
4) It provides services like factoring, leasing, etc. to small
units.

NHB (NATIONAL HOUSING BANK)
 Set up in July 1988
 A principal agency to promote housing finance
 Wholly owned subsidiary of RBI
 Registered With capital of 350 crore which can be
increased to 2000 crores. The board is authorized
to issue increased capital to RBI, center govt.

FUNCTIONS OF NHB
 Extending refinance to different primary lenders in respect of
 Eligible housing loans extended by them to individual beneficiaries,
 for project loans extended by them to various implementing agencies.
1) Lending directly in respect of projects undertaken by public housing agencies
for housing construction and development
of housing related infrastructure.
2) Guaranteeing the repayment of principal and payment of interest on bonds
issued by Housing Finance Companies.
3) Acting as Special Purpose Vehicle for securitising the housing loan receivables.

INVESTMENT INSTITUITIONS
 Are those who invest the money collected in further
securities and investments outside .LIKE
LIC
GIC

LIC (LIFE INSURANCE CORPORATION
 Set up in 1956
 LIC was formed by nationalizing 245 life
insurance companies.
 The main aim was to
 spread insurance
 Mobilize savings
 Investing funds
 Act as trustees

CONTINUE…..
 promoting a sense of pride and job satisfaction
among agents and employees
 Diversification by LIC
 LIC HOUSING FINANCE
 LIC MUTUAL FUNDS
 Jeevan bima sahyog assets mgt co(JBSAMC)
 LIC International EC

VISION & MISSION
 Mission
"Explore and enhance the quality of life of people
through financial security by providing products and
services of aspired attributes with competitive
returns, and by rendering resources for economic
development."
 Vision
"A trans-nationally competitive financial
conglomerate of significance to societies and Pride
of India."

G.I.C. (GENERAL INSURANCE
CORPORATION)
 It was incorporated on 22 November 1972.
 The Government of India (GOI), through
Nationalisation took over the shares of 55 Indian
insurance companies and the undertakings of 52
insurers carrying on general insurance business.
Main objective:-
 GIC was formed for the purpose of superintending,
controlling and carrying on the business of general
insurance.

VISION & MISSION
Vision
“To be a leading global reinsurance and risk solution provider”
Mission:-
 Building long-term mutually beneficial relationship with
business partners
 Practicing fair business ethics and values
 Applying “state-of-art” technology, processes including
enterprise risk management and innovative solutions.
 Developing and retaining highly motivated professional team of
employees
 Enhancing profitability and financial strength befitting the
global position

STATE FINANCIAL CORPORATION’S
(SFCS)
 State Financial Corporations (SFCs) To meet the
financial needs of small and medium enterprises, the
government of India passed the State Financial
Corporation Act in 1951
 Under the Act, SFCs have been established by State
governments to meet the financial requirements of
medium and small sized enterprises. There are 18
SFCs at present.

OBJECTIVES OF SFC’S
1) Provide financial assistance to small and medium industrial
concerns.
2) Provide long and medium-term loan repayable ordinarily within
a period not exceeding 20 years.
3) Grant financial assistance to any single industrial concern
under corporate or co-operative sector with an aggregate
upper limit of rupees Sixty lakhs.
4) To lay special emphasis on the development of backward
areas and small scale industries

FUNCTIONS OF STATE FINANCIAL
CORPORATION
1) Grant of loans and advances to or subscribe to debentures of industrial
concerns repayable within a period not exceeding 20 years.
2) Underwriting of the issue of stock, shares, bonds or debentures by
industrial concerns.
3) Subscribing to, or purchasing of, the stock, shares, bonds or debentures
of an industrial concern subject to a maximum of 30 percent of the
subscribed capital, or 30 percent of paid up share capital and free
reserve, whichever is less.
4) Planning and assisting in the promotion and development of industries.

 The 'District Industries Centre' (DICs) programme was started
by the central government in 1978 with the objective of
providing a focal point for promoting small, tiny, cottage and
village industries in a particular area and to make available
to them all necessary services and facilities at one place. The
finances for setting up DICs in a state are contributed equally
by the particular state government and the central
government. To facilitate the process of small enterprise
development, DICs have been entrusted with most of the
administrative and financial powers. For purpose of allotment
of land, work sheds, raw materials etc., DICs functions under
the 'Directorate of Industries'. Each DIC is headed by a
General Manager who is assisted by four functional
managers and three project managers to look after the
following activities :

ACTIVITIES OF DISTRICT INDUSTRIES CENTRE
(DIC):
 i. Economic Investigation
ii. Plant and Machinery
iii. Research, education and training
iv. Raw materials
v. Credit facilities
vi. Marketing assistance
vii. Cottage industries

* In each district one agency to deal with all requirements of small and village
Industries. This is called “District Industries Centre”
* The District Industries Centres have undertaken various programmes for
investment promotion at the grassroot level such as a organizing seminars
workshops, extending support for trade fairs and exhibitions organized by various
Industries associations.
*All the services and support required by for MSME units under the single roof of
the District Industries Centre. The Centre has a separate wing to look-after the
special needs of cottage and house-hold industries as district from small
industries.
Administration
General Manager is the head of the District Industries Centre. The post of
General Manager is of Joint / Deputy Commissioner level. The General Manager
has senior officers to assist him, such as Manager (Raw Material), Manager
(Credit), Manage (Economic Investigation), Manager (Marketing) Industrial
Promotion Officer(IPO) and Technical Officer cum Project Manager (PM)

ESTABLISHMENT
 All the services and support required by small
entrepreneurs is provided under the single roof of the
District Industries Centre. For example of Gujarat’s district
Centre.
Till 1997gujrat has set up 23 district Industrial Centers ,
few of them are : Amreli, Bhavnagar, Kutch, Junagadh,
Sabarkantha, Banaskantha, Panchmahal, Bharuch,
Surendranagar, Mehsana, Valsad, Surat, Vadodara, Kheda,
Ahmedabad, Rajkot ,Jamnagar ,Ganadhinagar etc.

MONITORING OF DICS
 The functioning of DICs and their achievement is monitored by Industries
Commissioner, Meeting of General Managers are organized frequently to
evaluate the performance and also help in resolving difficulties in implementation
of different schemes. To resolve the problems of industries/industrialists, there
are two types of committee at the district level.
* District Industrial Executive Committee (DIEC)
DIEC is constituted for solving industry related problems And promoting
industrial growth. District Collector is the Chairman of this Committee and
General Manager of DIC is the Member Secretary. The other members of the
DIEC are President of District Panchayat, DDO, MP, MLAs, Prominent persons
active in Industries in the district and members of all district level industries
associations.
* Single Window Industrial Follow up Team (SWIFT)
Entrepreneurs face many difficulties when they start new industries. They have
to deal with many government agencies and get many clearances. SWIFT helps
them in guiding solving their problems at a single spot. This committee is
working under the District Collector, General Manager of DIC is the Member
Secretary and District Development Officer is Vice President of SWIFT. All
industries related officers in the district are members of this committee.

OBJECTIVES OF DISTRICT INDUSTRIES
CENTRE (DIC)
 The important objectives of DICs are as follow :
i. Accelerate the overall efforts for industrialization of the district.
ii. Rural industrialization and development of rural industries and
handicrafts.
iii. Attainment of economic equality in various regions of the
district.
iv. Providing the benefit of the government schemes to the new
entrepreneurs.
v. Centralization of procedures required to start a new industrial
unit and minimization- of the efforts and time required to obtain
various permissions, licenses, registrations, subsidies etc.

FUNCTIONS OF DISTRICT INDUSTRIES
CENTRE (DIC):
 i. Acts as the focal point of the industrialisation of the district.
ii. Prepares the industrial profile of the district with respect to :
iii. Statistics and information about existing industrial units in the district in the
large, Medium, small as well as co-operative sectors.
iv. Opportunity guidance to entrepreneurs.
v. Compilation of information about local sources of raw materials and their
availability.
vi. Manpower assessment with respect to skilled, semi-skilled workers.
vii. Assessment of availability of infrastructure facilities like quality testing,
research and development, transport, prototype development, warehouse etc.
viii. Organises entrepreneurship development training programs.
ix. Provides information about various government schemes, subsidies, grants
and assistance available from the other corporations set up for promotion of
industries.
x. Gives SSI registration.
xi. Prepares techno-economic feasibility report.
xii. Advices the entrepreneurs on investments.
xiii. Acts as a link between the entrepreneurs and the lead bank of the district.

xiv. Implements government sponsored schemes for educated
unemployed people like PMRY scheme, Jawahar Rojgar Yojana, etc.
xv. Helps entrepreneurs in obtaining licenses from the Electricity
Board, Water Supply Board, No Objection Certificates etc.
xvi. Assist the entrepreneur to procure imported machinery and raw
materials.
xvii. Organise marketing outlets in liaison with other government
agencies.
Registration
EM Part-I acknowledgement
EM Part-II acknowledgement
C.S.P.O.
Lubricating, Oil, Grease Licence
Recommendation
Land recommendation for N.A.
agencies.

Incentive Scheme
Seminars
District or Taluka Level
Buyer-Seller & Exhibition
Others Activities
Recovery of Package Loan margin Money Loan & Subsidy
Welfare of Salt Workers and Recovery of Royalty from Salt
Workers.
Follow up of Industrial Approvals.
Follow up of units which have availed benefits under incentives
schemes
Self Employment scheme
Recommendation of loan applications under Vajpayee Bankable
Scheme
Recommendation of loan application under PMEGP Scheme
Manav Kalyan Yojana – Tool kits to artisans.

Co-operative Package Scheme
Package Scheme
Handloom Development Scheme
Training & Production centre
Woolen Carpet Centre
Weaving Scheme
Recovery of Loan & Share contribution of Co-operative
Societies
Liquidation of Industrial Society
Preparation of Project Profiles
Audit of Industrial Society
Gramodyog Vikas Kendra
Hastakala Mela

Development financial institution & District investment center

More Related Content

What's hot (20)

Similar to Development financial institution & District investment center (20)

Recently uploaded (20)

Development financial institution & District investment center