Development Bank- Mithun

8/8/2019 Development Bank- Mithun

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DEVELOPMENTBANKS

DEVELOPMENTBANKS

DEVELOPMENT

BANKS

DEVELOPMENT BANKS


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INTRODUCTION

A Development Bank is a development financeinstitution 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 Bank'soverarching goal is to decrease poverty in Asiaand the Pacific. It helps improve the value of

people's lives by providing loans and scientificsupport for a broad variety of developmentactivities.


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DEFINITION

A developed bank may be defined as a

financial institution concerned with providing alltypes financial assistance (medium as well aslong term) to business unit in the form of loans,underwriting, investment and guarantee

operation and development in general andindustrial area

D.M. MITHANI


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CONCEPT

Concept arisen in many countries after the second world war.

In under-developed the need was much more due to the large numberof organizational & financial problem inherent in the process ofindustrialization

The International Bank for Reconstruction and Development (IBRD)known as the World Bank and the International Monetary Fund (IMF)are examples of development banks at international level.


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OBJECTIVE

To serve as an agent of development in various sectors, namely, 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 provideemployment opportunities as well as higher production.

To develop entrepreneurial skills.

To promote the development of rural areas.

To finance the housing, small scale industries, infrastructure, and social utilities


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Functions Of

Development Bank

Increase loans and equity investment to its developingassociate countries for their monetary and social development.

Provides technical help for the planning and implementation ofdevelopment projects and programs and for advisory services.

Promotes and facilitates speculation of public and private capitalfor growth and development.

Responds to request for assistance in coordinating growthpolicies and plans of its increasing countries.


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Classification of Development Banks in India

1 All India Development FinancialInstitutions

2 The State level Financialinstitutions

3The insurance companies


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Industrial Finance Corperation

of India (IFC

I) It is Indias first DFI.

It was established on 1st July 1948, under

the Industrial Finance Corporation Act as astatutory corporation.

It was set up to provide medium and long

term credit for Industrial concerns in India.

It was converted into a limited company on

1st July 1993


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Function Of IFCI

Financial Assistance

Setting up of newindustrialundertaking

Expansion ordiversification ofexisting

Modernization orrenovation of

existing, etc.

Promotional Activates

Discoversopportunities forpromoting newenterprise

Providing guidancethrough specializedagencies inidentification,preparation,implication of projects

etc.

Helps in acceleratinggrowth & reducingregional industrial &income disparities

Financial Services

Corporatecounseling forfinancial

reconstruction

Assistance insettlement ofterms & conditionswith foreigncollaboration

Revival of sick unit

Financing of riskyprojects


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IDBI It was established in 1964 by parliament as a wholly owned

subsidiary of the RBI.

In 1976, the banks ownership was transferred to the government ofIndia.

It was accorded the status of the principal financial institution forcoordinating the working of institutions at state level engaged in

financing, promoting and developing industries. It is currently 4th largest bank In India and 10th largest development

bank in the world in terms of reach with 1228 ATMs, 725 branchesand 486 centers.

Some of the institutions built by IDBI are National Stock Exchange of India (NSE),

Export-Import Bank of India (Exim Bank,

Small Industries Development bank of India (SIDBI), Entrepreneurship Development Institute of India.

National Securities Depository Services Ltd (NSDL)

Stock Holding Corporation of India (SHCIL),

Credit Analysis & Research Ltd, etc


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Functions

To co-ordinate the activities of other institutions providing term finance toindustry and to act as an apex institution

To provide refinance to financial institutions grating medium & long termfinancing to industry

To provide refinance to scheduled banks or c0-p banks

To provide refinance for export credits granted by banks

To provide technical and administrative assistances for promoting, Mgmt &growth of industry

To undertake market surveys and techno-economic studies in the industry

To grant direct loans and advances to industrial concerns, etc.


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IIBIL or IRBI

IRBI was established on March 20, 1985 under Indianindustrial Reconstruction Bank Act 1984 as a result ofreconstituting Indian industrial Reconstruction Corporation.

The basic aim of establishing IRBI was to revive sick and

closed industrial units and to act as prime loan areconstruction agency.

IRBI has been rechristened as industrial investment Bank ofIndia Ltd (IIBIL) with effect from March 27, 1997.

The main Objective of IRBI is to assist in reconstruction andrehabilitation of industrial unit which lead to closed down, orwere likely to close down by rendering financial assistances


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Function of IRBI

It identifies the problems/weaknesses in the technical, financial andadministrative fields of the sick units and gives expert advice forremedial action.

It provides technical and managerial guidance either through its own

staff or by procuring suitable personnel from the market

It acts as a catalyst in procuring assistance from banks, financialinstitutions and other government agencies.

It advises the management on product mix and allied constructionassistance for the sick/closed units during the year.

The bank helps units in finding the solution of labour-managementproblems.


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SIDBI

It was set up in 1990 under an act of

Parliament the SIDBI act 1989.

The charter establishing SIDBI envisagedSIDBI to be the principal financial

institution for promotion, financing and

development of industries in small scale

sector and to coordinate the functions ofother institutions engaged in similar

activities.

It is among top 30 development bank of


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Functions

It renders equity type of assistance to new promoters,women and ex-service under National Equity Fund.

It provides assistance to the voluntary organizations

working for development upliftment of under privilegedwomen

It also provides technical support to small scale sectorfor promotion, development and growth.

It also extends financial support to NSIC and SIDCsfor the purchase of material an marketing of SSIproducts and for financing hire-purchase and leasingactivities


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EXIM Bank

It is wholly owned by the government of

India.

It was set up for the purpose of financing,facilitating and promoting foreign trade in

India.


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NABARD

It is an apex institution set up for providing andregulating credit and other facilities for thedevelopment and promotion of agriculture, smallscale industries , cottage and village industries,

handicrafts and other rural crafts, and other alliedeconomic activities in rural areas with a view topromoting integrated rural development andsecuring prosperity of rural areas and mattersconnected therewith or incidental thereto.

It also operates various schemes such as KisanCredit Card, Watershed Development scheme,etc.


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ICICI

It was among the first development

banking the world to be set up in the

private sector.

It w2as formed in 1955 at the initiative of

World Bank and Govt. of India and

representative of Indian Industry.

The principal objective was to create a

development financial institution for

proving medium and long term financing of

Indian business.


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SIDC

It was established under the companies

act 1956, as wholly-owned undertaking of

the state governments.

They act as nodal agencies of state

government for promotion of industrial

growth and development of infrastructure

facilities.

There are 28 SIDCs in the country.


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SFC

Presently there are 18 SFCs operating in

their respective state or union territories, of

which 17 were set up under the SFCs Act

1951.


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THANK YOU

Mithun Abraham

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Development Bank- Mithun

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