IFCI, Industrial Finance Corporation of INDIA
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The Industrial Finance Corporation of India (IFCI) was established in 1948 by the Government of India to provide long-term financing to industries facing scarcity of capital. IFCI is the first development financial institution in India and provides medium to long term credit to public and private manufacturing companies. It has played a key role in modernizing Indian industry by providing funds to sectors like agriculture, basic goods, infrastructure and services. Over the years, IFCI has sanctioned over Rs. 462 billion to more than 5,700 companies, contributing significantly to India's industrial growth.
IFCI, Industrial Finance Corporation of INDIA
- 1. INDUSTRIAL FIANANCE CORPORATION OF INDIA By: Vaibhav Agarwal Asst. Prof. SOM BBDU, Lucknow UNIT 3 Business Organisation BBA 1st Year
- 2. The Industrial Finance Corporation of India Limited was incorporated on July 1, 1948 by the Government of India. IFCI was established to overcome the scarcity of long-term finance plans in the industrial sector. IFCI is the first Development Financial Institution in India. The Corporation provides medium and long-term credits to industrial concerns in India. Any public limited company or co-operative society incorporated and registered in India which is in the manufacturing, preservation or processing of goods, or in the shipping, mining or hotel industry or in the generation or of distribution of electricity or any other form of power, is eligible for financial assistance. INTRODUCTION
- 3. During the period of independence in 1947, the capital market scenario was terrible. In spite of the major requirement of capital market in India, there were no providers for it. To add to the problems, there were no merchant bankers and underwriting firms. The commercial banks were not well-equipped to render long-term financial plans in the industrial sector. Indian finance market were in great trouble when the Government of India decided to launch the IFCI with the aim to provide long-term financial plans to all the sectors of Indian industry. HISTORY
- 4. The Development Financial Institution in India (DFI) was incorporated to make inexpensive funds easily available for the industrial sector through RBI’s Statutory Liquidity Ratio or SLR. This Statutory Liquidity Ratio enabled the corporate borrowers to take loans at a much concessional rates. During the early 1990s, the Government of India realized that the financial system of the country needs more flexibility. The Government also felt that IFCI Ltd. needed to contact directly the capital market for any kinds of funds or other financial issues. So in 1993, the Government of India transferred IFCI from Statutory Liquidity Ratio to a company registered under the Indian Companies Act, 1956. HISTORYAND FORMATION
- 5. IFCI implemented Government of India plannings to ensure financial benefits into services. IFCI carried out all the responsibilities regarding Government's industrial policy initiatives till the establishment of ICICI in 1956 and IDBI in 1964. It made a significant contribution to the modernization of Indian industry, export promotion, import substitution, pollution control, energy conservation and rendering direct and indirect employment. Some sectors that have directly benefited from IFCI include: Agro–based industry (textiles, paper, sugar). Service industry (hotels, hospitals). Basic industry (iron & steel, fertilizers, basic chemicals, cement). Capital & intermediate goods industry (electronics, synthetic fibers, synthetic plastics, miscellaneous chemicals) and Infrastructure (power generation, telecom services). It has reputed clients namely Ranbaxy Laboratories, Jaypee Group, Lanco, Emaar, Adani Group, JSW energy, Bhushan Power and Steel etc. FUNCTIONS AND ACTIVITIES
- 6. The economic contributions of The Industrial Finance Corporation of India Limited has been quite large-scale since its establishment. IFCI has sanctioned funds of an amount of Rs. 462 billion to 5707 companies and has paid out Rs. 444 billion in totality. The business entrepreneurs have got immense help from IFCI during starting a business or expanding the business. IFCI has been a great helping hand to the entire industrial sector in India and most importantly it was the only support at the time of urgency of funds. FUNCTIONS AND ACTIVITIES
- 7. THANKS Sources: 1. http://business.mapsofindia.com/sectors/public/the-industrial-finance- corporation-limited.html 2. http://profit.ndtv.com/stock/ifci-ltd_ifci/reports 3. http://ifciltd.com/AboutUs/WhatWeAre.aspx 4. P.C. Tulsian, Business Organisation and Management