Financial institutionS

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
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 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
 Term lending
 Refinance institutions
 Investment institutions
 State level institutions
Term lending

Institutions that makes loans. viz…



 IFCI
 IDBI
 ICICI
 IIBI
 EXIM
 TFCI

REFINANCE INSTITUtIONS
NABARD
SIDBI
NHB


INVESTMENT INSTITUITIONS
LIC
GIC
UTI
STATE LEVEL INSTITUTIONS
SFC
SIDC
IFCI (INDUSTRIAL Finance CORPORATION OF
INDIA)
 Itwas 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 Central

govt, 6 by shareholders)
- -full time chairperson
Idbi (industrial development 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
by RBI, 20 other directors.

 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.

Industrial Credit and Investment Corporation of
India (ICICI)
 Established in 1955 As a public ltd co, at the
initiative of world bank.
 The objectives of ICICI is to encourage
establishment of new industries, to help in
expansion and modernization, technical and
managerial aid to increase production and
employment.
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 In October 2001 .BOD Approved ICICI LTD. AND
ICICI BANK LTD. Wef. 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.
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 ICICI is first Indian co. listed in New York stock
exchange.
 Foreign financial investor own around 38% shares.
 Technology, strategy, low cost branches
innovations are key reasons of its 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.

export import bank (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
central govt.

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 The main objective of EXIM is to provide
financial assistance to exporters and importers.
It coordinates the working of those institutions
which can promote international trade.
 Management is MD+17 other directors
representing Govt., RBI, ECGC, Public sector
banks.


Industrial Investment Bank of India (IIBI)

 Established in 1985.
 One of oldest banks in India.
 Provides financial products and services.
 Headquarter in Kolkata, India.
 Pursues in a kind of fund based and non-fund
based activities, including project finance;
short duration, and working capital/other
short-term loans to companies in India and
globally.

 The Industrial Reconstruction Corporation of
India Ltd., set up for rehabilitation of sick
industrial companies, was reconstituted as
Industrial Reconstruction Bank of India in
1985 under the IRBI Act, 1984. With a view to
converting the institution into a full-fledged
development financial institution, IRBI was
incorporated under the Companies Act, 1956,
as Industrial Investment Bank of India Ltd.
(IIBI) in March 1997.
TOURISM FINANCE CORPORATION OF
INDIA (TFCI)

 The GOI, pursuant to the recommendations of

the National Committee on Tourism viz.
Yunus Committee set up by the Planning
Commission, decided in 1988, to promote a
separate All-India Financial Institution for
providing financial assistance to tourism-
related activities/projects.



 Inaccordance with the above decision, the IFCI
Ltd. along with other All-India
Financial/Investment Institutions and
Nationalized Banks promoted a Public Limited
Company under the name of "Tourism Finance
Corporation of India Ltd. (TFCI)" to function
as a specialized All-India Development
Financial Institution to cater to the financial
needs of tourism industry.
 Refinancing institutions
Are those which do not give finance
directly but they create such structure
by which the funds are allocated up to
the minimum level.
national bank for agriculture and rural
development (nabard)
 Started functioning from 1july 1982.
 Set up with an initial capital of 100 crores, now it is
2000 crores fully subscribed by GOI & 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 credit,developmental,regulatory
functions
 Small Industries Development Bank of India
(Sidbi)
 SIDBI was established under SIDBI Act 1988
and commenced its operations w.e.f. April 02,
1990 with head-quarters in Lucknow and
branches all over the country, as a subsidiary of
IDBI. The objective of establishment of SIDBI,
in particular, is to strengthen and broad-base
the existing institutional arrangement to meet
the requirement of SSI and tiny industries.

Small Industries Development Bank of India
(Sidbi)

 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

national housing bank (nhb)
 NHB, the apex bank for Housing, was
established on July 09, 1988 under NHB
Act 1987, as a wholly owned subsidiary of
RBl with headquarters in New Delhi. The
bank was set up with the main purpose of
setting up of an institution to operate as a
principal agency to promote housing
finance institutions and to provide
financial and other support to these
institutions.

national housing bank (nhb)
 Setup 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,
central govt.

Investment instituitions
Are those who invest the money
collected in further securities and
investments outside.
LIC
GIC
UTI


 Life Insurance Corporation of India (LIC)

 It is the largest state-owned life insurance

company in India, and also the country's
largest investor. It is fully owned by the
Government of India. It also funds close to
24.6% of the Indian Government's
expenses. It was founded in 1956 with the
merger of more than 200 insurance
companies and provident societies.


 Headquartered in Mumbai, the financial and
commercial capital of India.
 It has 8 zonal Offices and 101 divisional offices
located in different parts of India, with 2048
branches located in different cities and towns of
India along with satellite Offices attached to
about 50 Branches.
 It has a network of around 1.2 million agents for
soliciting life insurance business from the
public.

General Insurance Corporation of India (GIC)

 General Insurance Corporation of India (GIC)

was formed in pursuance of Section 9(1) of
General Insurance Business (Nationalization)
Act, 1972 (GIBNA). It was incorporated on 22
November 1972 under the Companies Act,
1956 as a private company limited by shares.
GIC was formed for the purpose of
superintending, controlling and carrying on the
business of general insurance.
Unit Trust of India (uti)

 UnitTrust of India established under the Unit Trust

of India Act, 1963. It has the world's largest
share in domestic mutual fund industry.
 UTI Bank was the first of the new private banks to
have begun operations in 1994, after the
Government of India allowed new private banks
to be established.

 The Bank was promoted jointly by the
Administrator of the specified undertaking of the
Unit Trust of India (UTI), Life Insurance
Corporation of India (LIC) and General
Insurance Corporation Ltd. The Bank today is
capitalized to the extent of Rs.232.86 Crores with
the public holding at 47.50 %.
STATE LEVEL INSTITUTIONS
 Several financial institutions have been set up at
the State level which supplement the financial
assistance provided by the all India
institutions. They act as a catalyst for
promotion of investment and industrial
development in the respective States. They
broadly consist of 'State financial
corporations' and 'State industrial
development corporations'.
 STATE FINANCIAL CORPORATION (sfc)
 SFC’s play a crucial role in the development of
small and medium enterprises in the concerned
States. SFCs have been set up with the objective
of catalyzing higher investment, generating
greater employment and widening the
ownership base of industries. They have also
started providing assistance to newer types of
business activities like floriculture, tissue
culture, poultry farming, commercial complexes
and services related to engineering, marketing,
etc. There are 18 State Financial Corporations in
the country.
List of sfc’s
 Andhra Pradesh State Financial Corporation (APSFC)
 Himachal Pradesh Financial Corporation (HPFC)
 Madhya Pradesh Financial Corporation (MPFC)
 North Eastern Development Finance Corporation (NED
 Rajasthan Finance Corporation (RFC)
 Tamil Nadu Industrial Investment Corporation Limite
 Uttar Pradesh Financial Corporation (UPFC)
 Delhi Financial Corporation (DFC)
 Gujarat State Financial Corporation (GSFC)
 The Economic Development Corporation of Goa (
EDC)
 Haryana Financial Corporation ( HFC )
 Jammu & Kashmir State Financial Corporation (
JKSFC)
 Karnataka State Financial Corporation (KSFC)
 Kerala Financial Corporation ( KFC )
 Maharashtra State Financial Corporation (MSFC )

 OrissaState Financial Corporation (OSFC)

 Punjab Financial Corporation (PFC)
 West Bengal Financial Corporation (WBFC)
 State Industrial Development Corporations
(SIDCs)
 Established under the Companies Act, 1956, as
wholly-owned undertakings of State
Governments, with the aim of promoting
industrial development in the respective States and
providing financial assistance to small
entrepreneurs. They are undertaking a variety of
promotional activities such as preparation of
feasibility reports; conducting industrial potential
surveys; entrepreneurship training and
development programmes etc. Few Examples of
State Industrial Development Corporations in the
country are:-
 Uttar Pradesh State Industrial Development
Corporation (UPSIDC)
 Andaman
& Nicobar Islands Integrated Development Corporation
 Andhra
Pradesh Industrial Development Corporation Ltd (
APIDC)
 Bihar State Credit and Investment Corporation Ltd. (
BICICO)
 Chhattisgarh
State Industrial Development Corporation Limited (
CSIDC)
 Goa Industrial Development Corporation