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THE INDUSTRIAL FINANCE

CORPORATION OF INDIA (IFCI)

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Mr Atul Kumar RaiCEO and Managing Director

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INTRODUCTION

The Government of India set up the IFCI under

IFCI Act in July 1948.

It is the first development financial institution

in the county to cater to the long-term financeneeds of the industrial sectors.

The main objective of IFCI is to making

medium & long term credits more readilyavailable for industrial concerns in India.

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The main focus of The Industrial Finance Corporationwas to provide long-term financial benefits to various

sectors in Indian industry and it has fulfilled it quite

efficiently. IFCI has also been quite subservient in

implementing the number of things that the

Government of India planned up 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.

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CAPITAL

The authorized capital of the corporation as

per IFCI Act 1948, was Rs.10 crores. It was

raised to Rs.20 crores by the Amendment Act1972.

50% of the share capital is held by the IDBI &

remaining 50% by banks, cooperative banks,insurance company, investment trusts etc.,

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ACTIVITIES

Direct Financing

Incidental Activities

Promotional Activities

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DIRECT FINANCING

Rupee loans

Sub loans in foreign currency

Underwriting of and/or direct subscription tothe shares & debentures of public limitedcompanies.

Foreign currency loans raised by industries from

foreign institutions Rupee loans raised by industries from scheduled

banks or state co-operative banks.

Guaranteeing of deferred payments formachinery {imported & indigenous}

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INCIDENTAL ACTIVITIES

IFCI has been authorized by Industrial FinanceCorporation ( Amendment) Act, 1982 toundertake incidental activities.

Undertaking research & surveys for evaluatingor dealing with marketing or investments andundertaking & carrying on techno-economicstudies.

Providing technical & administrative assistanceto any industrial concern for the promotion,management or expansion of any industry.

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PROMOTIONAL ACTIVITIES

Merchant Banking operations.

The objective of IFCI in this case has been:

Fill in the gaps in the industrial infrastructure for

promotion & growth of industries. To provide much needed guidance in project

identification, formulation, implementation,operation etc., to the new, tiny, small scale andmedium scale entrepreneurs.

To improve the productivity of human and materialresources; a better deal to the weaker,underprivileged sections of the society in line withsocio-economic objectives laid down by

Government of India.

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AREAS OF ASSISTANCE

Assistance from IFCI single or jointly with otherinstitutions is available for:

1. Setting up of new industrial projects.1. Expansion of existing units

2. diversification into new lines of activity.

3. Renovation / rehabilitation / Modernization ofexisting units.

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Resources are in the form of:

Loans from RBI Share capital

Retained earnings

Repayment of loan Issue of bonds

Loans from government

Lines of credit from foreign lending agencies Commercial borrowings in international capital

market.

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The Industrial Finance Corporation of India had made

a wide range of contributions in various sectors in

Indian industry. Some of the noteworthy contributions

of IFCI include improvement of Indian industry, exportpromotion, import permutation, development in

business, pollution control measures, energy

preservation, and rendering direct and indirect

employment. There are a number of industrial sectors

that have been massively benefited from The

Industrial Finance Corporation of India Limited. They

are as follows:

CONTRIBUTIONS OF IFCI FOR THE

IMPROVEMENT OF INDIAN INDUSTRY

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Capital & intermediate goods industry that

includes products such as electronics, synthetic

plastics, synthetic fibers, and miscellaneous

chemicals

Service industries that include hotels and

hospitalsConsumer goods industry such as textiles,

paper, and sugar

Infrastructure sector which involves powergeneration and telecom services

Basic industries involving products such as

cement, iron & steel, fertilizers, basic chemicals

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The economic contributions of The IndustrialFinance 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 intotality. The business entrepreneurs have got

immense help from IFCI as well when they started

off with any new business or even on their way to

expand the already existing 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 scarcity.

THE ECONOMIC CONTRIBUTIONS

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