DEVELOPMENT FINANCIAL INSTITUTIONS

EXIM
The Export-Import Bank of India was set up by the Government
of India on January 1, 1982. Its main objects are:

1. To ensure and integrated and co-ordinated approach in solving

the allied problems encountered by exporters in India.

2. To pay specific attention to the exports of capital goods;

3. Export projection;

4. To facilitate and encourage joint ventures and export of

technical services and international and merchant banking.

5. To extend buyers’ credit and lines of credit;

6. To tap domestic and foreign markets for resources for

undertaking development and financial activities in the export
sector.

The functions of Exim Bank include:

a) Planning, promoting and developing exports and imports.

(b) Providing technical, administrative and managerial assistance

for promotion, management and expansion of export sector.
(c) Undertaking market and investment surveys and techno-
economic studies related to development of exports of goods and
services.

The Exim Bank has a 17-member Board of Directors, with Chairman

and Managing Director as the chief executive and full-time director.
The Board of Directors consists of the representative of the
Government of India, RBI, IDBI, ECGC, commercial banks and the
exporting community.

NABARD

Objectives
More than 50% of the rural credit is disbursed by the Co-operative
Banks and Regional Rural Banks. NABARD is responsible for
regulating and supervising the functions of Co-operative banks and
RRBs. NABARD works towards providing a strong and efficient rural
credit delivery system, capable of taking care of the expanding and
diverse credit needs of agriculture and rural development.

Functions of NABARD
Credit Functions:

 Framing policy and guidelines for rural financial institutions.

 Providing credit facilities to issuing organizations
 Monitoring the flow of ground level rural credit.
 Preparation of credit plans annually for all districts for
identification of credit potential.

Development Functions:
  Help cooperative banks and Regional Rural Banks to prepare
development actions plans for themselves.
 Help Regional Rural Banks and the sponsor banks to enter into
MoUs with state governments and cooperative banks to
improve the affairs of the Regional Rural Banks.
 Monitor implementation of development action plans of banks.
 Provide financial support for the training institutes of
cooperative banks, commercial banks and Regional Rural
Banks.
 Provide financial assistance to cooperative banks for building
improved management information system, computerisation of
operations and development of human resources

SIDBI

Objectives of SIDBI

1. To promote marketing of products of small scale sector.

2. To upgrade technology and also undertaking modernization of
small scale units.
3. To provide more financial assistance to small scale ancillary and
tiny sector.
4. To encourage employment oriented industries.
5. To coordinate all the other institutions involved in the
promotion of small scale industries.
Functions of SIDBI
Coordinating and financing the various institutions involved in the
development of small industries are undertaken by SIDBI.

lts functions are

Refinance to SSI:
Refinancing loans and advances provided by commercial banks to
small scale industrial units. Different types of loans are given to small
scale industries and as per the recommendations of Nayak
Committee, additional funds have been given to commercial banks
for promoting more borrowings of small scale industries. In fact,
there are commercial banks with separate branches meant
exclusively for small scale industries.
Discounting the bills of SSIs:
Apart from discounting the bills of small scale industries, even
hurdles arising out of financing small scale industries are being
discounted. The bank credit has gone up to Rs. 2,18,219 crores. The
percentage of bank credit to SSI has gone up to 17.5.

SIDBI offers assistance to exports:

Direct assistance to export oriented units and also to import
substituting units in the small scale sector is given the highest
priority. There has been a simplified procedure for the exports of
small scale industries. Products of SSI exporters are displayed in
international exhibitions with the help of SIDBI. Other export related
expenditures are borne by SIDBI. Latest packing standards and
training programmes on packing for exports are also financed by
SIDBI. Trade delegations and sales and study teams are sponsored
for small scale sector under Marketing Development Assistance
scheme.

Non finance services:

Under this scheme, SIDBI undertakes with the help of other
institutions marketing survey and the potentialities of small scale
industries in the particular area. Wherever possible, it helps in the
procurement raw materials.

Factoring, Leasing and HP finance:

In factoring services, SIDBI finances 80% of the bills to the seller and
after obtaining the remaining 20% balance, it repays to the seller and
for this service it obtains a factoring commission.
Leasing:
After the increase in the fixed capital limit of Rs. 1 crore to SSI, there
has been increasing demand for leasing equipment. The small scale
industries have expanded their activities as lease finance institutions
have enabled them to obtain costly equipment which are otherwise,
not possible within the purview of small scale industries, In fact, this
has helped them in modernizing their industry.
HP finance:
Hire purchase financing has also helped small scale industries in
acquiring machinery of a higher value. In fact, certain machinery are
even imported from foreign countries on a deferred payment basis.
Assistance to other financial institutions:
In every State, State Finance Corporations have been promoted for
financing small scale industries. They are under the control of
respective state governments. At the national level, a separate
corporation is promoted for financing small scale industries
called National Small Scale Industries Corporation. This was started
in 1995 to promote, aid and ensure faster growth in small scale
industries.

IFCI
Industrial Finance Corporation of India (IFCI)
Industrial Finance Corporation of India (IFCI) is actually the first
financial institute the government established after independence.
The main aim of the incorporation of IFCI was to provide long-term
finance to the manufacturing and industrial sector of the country.

Functions of the IFCI

 First, the main function of the IFCI is to provide medium and long-
term loans and advances to industrial and manufacturing
concerns. It looks into a few factors before granting any loans.
They study the importance of the industry in our national
economy, the overall cost of the project, and finally the quality of
the product and the management of the company. If the above
factors have satisfactory results the IFCI will grant the loan.
 The Industrial Finance Corporation of India can also subscribe to
the debentures that these companies issue in the market.
 The IFCI also provides guarantees to the loans taken by such
industrial companies.
 When a company is issuing shares or debentures the Industrial
Finance Corporation of India can choose to underwrite such
securities.
 It also guarantees deferred payments in case of loans taken from
foreign banks in foreign currency.
 There is a special department the Merchant Banking & Allied
Services Department. They look after matters such as capital
restructuring, mergers, amalgamations, loan syndication, etc.
 It the process of promoting industrialization the Industrial Finance
Corporation of India has also promoted three subsidiaries of its
own, namely the IFCI Financial Services Ltd, IFCI Insurance
Services Ltd and I-Fin. It looks after the functioning and regulation
of these three companies.

IDBI

Objectives and Functions of IDBI

The main objectives of IDBI is to serve as the apex institution for term finance
for industry in India. Its objectives include:
 Co-ordination, regulation and supervision of the working of
other financial institutions such as IFCI , ICICI, UTI, LIC, Commercial Banks
and SFCs.
 Supplementing the resources of other financial institutions and there by
widening the scope of their assistance.
 Planning, promotion and development of key industries
and diversification of industrial growth.
 Devising and enforcing a system of industrial growth that conforms to
national priorities.

Functions
The IDBI has been established to perform the following functions-
 To grant loans and advances to IFCI, SFCs or any other financial
institution by way of refinancing of loans granted by such institutions which are
repayable within 25 year.
 To grant loans and advances to scheduled banks or state co-operative
banks by way of refinancing of loans granted by such institutions which are
repayable in 15 years.
 To grant loans and advances to IFCI, SFCs, other institutions, scheduled
banks, state co-operative banks by way of refinancing of loans granted by such
institution to industrial concerns for exports.
 To discount or re-discount bills of industrial concerns.
 To underwrite or to subscribe to shares or debentures of industrial
concerns.
 To subscribe to or purchase stock, shares, bonds and debentures of other
financial institutions.
 To grant line of credit or loans and advances to other financial institutions
such as IFCI, SFCs, etc.
 To grant loans to any industrial concern.
 To guarantee deferred payment due from any industrial concern.
 To guarantee loans raised by industrial concerns in the market or from
institutions.
 To provide consultancy and merchant banking services in or outside
India.

IDFC

IDFC was incorporated on 30 January 1997 with its registered office

in Chennai and started operations on 9 June 1997. In 1998 the
company registered with the Reserve Bank of India (RBI) as a non-
banking financial company and in 1999 it formally became a Public
Financial Institution. IDFC registered with the Securities and
Exchange Board of India (SEBI) as a merchant banker and as an
underwriter in 2000 and in 2001 as a debenture trustee. The company
also set up Infrastructure Development Corporation (Karnataka) Ltd
(IDECK) pursuant to a shareholders agreement between IDECK and
the State of Karnataka, HDFC and IDFC.
In 2002, the company incorporated IDFC Asset Management
Company Ltd as a subsidiary company and Uttaranchal Infrastructure
Development Company Ltd, a joint venture with the Government
of Uttarakhand. In 2003 it became an investor in and sponsor of the
India Development Fund.
In August 2005 the company's equity shares were listed at
the National Stock Exchange of India (NSE) and Bombay Stock
Exchange (BSE) after an initial public offering.
In 2006 IDFC raised $450 million for their second infrastructure
focused private equity fund. In June 2006, the company agreed
a memorandum of understanding with SBI Capital Markets for
syndication of debt financing for Infrastructure projects.
In 2006-07, the company increased its stake in National Stock
Exchange of India Ltd from 2.2% to 8.2% and acquired an 8.71%
stake in the Asset Reconstruction Company (India) Ltd. The company
along with Citigroup, India Infrastructure Finance Company Ltd. and
the global private equity company Blackstone, launched a USD
5 billion initiative for financing infrastructure projects in India.
During the year, the company also set up IDFC Project
Equity Company Ltd to manage the proposed USD 2 billion third
party equity component of the 'India Infrastructure Initiative', the
company acquired 33.33% stake in SSKI Securities Pvt Ltd (SSKI),
which is a domestic mid-size investment bank and an institutional
brokerage and research platform, with membership of the BSE and
the NSE. In May 2008, the company entered into asset management
by acquiring the AMC business of Standard Chartered Bank in India,
namely Standard Chartered Asset Management Company Pvt Ltd and
Standard Chartered Trustee Company Pvt Ltd; the acquired
companies was re-branded as IDFC Asset Management Company Pvt
Ltd and IDFC AMC Trustee Company Pvt Ltd respectively.
In 2008-09, the company subscribed 100% of equity shares of IDFC
Capital (Singapore) Pte Ltd, an emerging markets private equity fund-
of-funds business. During the year, the company established IDFC
Foundation to focus on capacity building, policy advisory and
sustainability initiatives. In 2009-10, the company consolidated its
position as a specialist infrastructure finance company and one of the
largest financiers of infrastructure in the country. The company
increased their equity stake from 80% to 100% in IDFC Securities
Ltd. Also, the company along with their wholly owned subsidiary
subscribed 100% equity shares of IDFC Pension Fund Management
Company Ltd. IDFC Capital Ltd subscribed 100% of equity shares of
IDFC Fund of Funds Ltd and IDFC General Partners Ltd. company
In January 2009, IDFC Projects Ltd signed a Memorandum of
Understanding with Gujarat State Energy Company Ltd and Bharat
Heavy Electricals Ltd (BHEL) to establish a 1600 MW Thermal
Power plant at Sarkhadi based on supercritical technology. During the
year 2010-11, Jetpur Somnath Highway Ltd (earlier known as IDFC
Capital Company Ltd and a direct subsidiary of IDFC) became a
subsidiary of IDFC Projects Ltd. A company under the name of Jetpur
Somnath Tollways Ltd was incorporated as a Subsidiary of IDFC
Projects Ltd. IDFC Projects, along with the other companies, further
floated Dheeru Powergen Ltd, which was converted from Private
Limited Company to a Public Limited Company. IDFC Asset
Management Company Ltd further floated IDFC Pension Fund
Management Ltd, one of the Pension Fund Managers appointed by the
Pension Fund Regulatory and Development Authority (PFRDA) to
manage retirement funds under the New Pension Scheme (NPS) open
to individuals in the private sector, and IDFC Investment Advisors
Ltd. A company under the name of IDFC Investment Managers
(Mauritius) Ltd has been incorporated as a Subsidiary of IDFC Asset
Management Company Ltd.
During the year, IDFC Foundation (a Non-Profit Organisation) was
incorporated as a wholly owned subsidiary company of IDFC. The
shares of the three Joint ventures Infrastructure Development
Corporation (Karnataka) Ltd, Uttarakhand Infrastructure
Development Company Ltd, and Delhi Integrated Multi-Modal
Transit System Ltd, which were initially held by IDFC, was
transferred to IDFC Foundation. Similarly, the units of the Trust,
namely India Infrastructure Initiative Trust & India PPP Capacity
Building Trust which were initially held by IDFC was also transferred
to the IDFC Foundation. Further during the year, Uniquest Infra
Ventures Pvt Ltd was incorporated as a direct subsidiary of the
company and IDFC Capital USA Inc. was also incorporated as a
subsidiary company of IDFC Securities Ltd.
In November 2011, SNC-Lavalin Group Inc. and the company
announced a joint venture that began with an introduction by Export
Development Canada . The new company, called Piramal Roads
Infrastructure Ltd, will work to develop a portfolio of road assets in
India.
April 2, 2014: RBI grants in-principle approval to IDFC to set up
banks. The in-principle approval will be valid for 18 months. RBI gets
green signal to issue bank licences.
June 24, 2015;RBI officially granted a banking licence to IDFC

Name : Mahima Singh Chauhan

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