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Industrial Finance Corporation of India

Formation of IFCI The IFCI was the 1st specialised financial institution setup in India to provide term finance to large industries in India. It was established on 1st July, 1948 under The Industrial Finance Corporation Act of 1948. IN 1993 it was reconstituted as a company to impart higher degree operational flexibility in operations.

Objectives of IFCI The main objective of IFCI is too provide medium and long term financial assistance to large scale industrial undertakings, particularly when ordinary bank accommodation does not suit the undertaking or finance cannot be profitably raised by the concerned issue of shares.

Activities Direct Financing Incidental Activities Promotional Activities

Direct Financing Sub loans in foreign currency Underwriting of and/or direct subscription to the shares & debentures of public limited companies. 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 for machinery {imported & indigenous}

Incidental Activities IFCI has been authorized by Industrial Finance Corporation ( Amendment) Act, 1982 to undertake incidental activities Undertaking research & surveys for evaluating or dealing with marketing or investments and undertaking & carrying on techno-economic studies. Providing technical & administrative assistance to any industrial concern for the promotion, management or expansion of any industry.

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 and medium scale entrepreneurs. To improve the productivity of human and material resources; a better deal to the weaker, underprivileged sections of the society in line with socio-economic objectives laid down by Government of India. Areas of Assistance Assistance from IFCI single or jointly with other institutions is available for:

Setting up of new industrial projects. Expansion of existing units/ diversification into new lines of activity. Renovation / Modernization of existing units. Functions of IFCI Granting loans or advances to or subscribing to debentures of industrial concerns repayable within 25 years. Also it can convert part of such loans or debentures into equity share capital at its option. Underwriting the issue of industrial securities i.e. shares, stock, bonds, or debentures to be disposed off within 7 years. Subscribing directly to the shares and debentures of public limited companies Guaranteeing of deferred payments for the purchase of capital goods from abroad or within India. Guaranteeing of loans raised by industrial concerns from scheduled balls or state co-operative banks. Acting as an agent of the Central Government or the World Bank in respect of loans sanctioned to the industrial concerns.