Professional Documents
Culture Documents
UNIT IV-
Development Banks- Role and policy measures relating to development banks and financial
institution in India, Products and services offered by IFCI, IDBI, SIDBI, IDFCL, EXIM Bank,
NABARD and ICICI.
Mutual Funds-Meaning and benefits of mutual funds, types of mutual funds, SEBI guidelines
relating to mutual funds.
Q.1 What are the development Banks? Describe the objectives, characteristics &functions
of Development banks.
Q.3.Define Nonbanking financial institutions with its types ,needs and functions.
Q.4.What is meant by Merchant Banking? What are the various categories of Merchant
Banking? Discuss its main functions and Role in India.
Q.5 What do you mean by Mutual Funds? Explain its Types & Benefits .
1. DEVELOPMENT BANKS
3. Unlike commercial banks, it does not accept deposits from the public.
6. It provides financial assistance not only to the private sector but also to the public sector
undertakings.
8. It does not compete with the normal channels of finance, i.e., finance already made available
by the banks and other conventional financial institutions. Its major role is of a gap-filler, i. e., to
fill up the deficiencies of the existing financial facilities.
9. Its motive is to serve public interest rather than to make profits. It works in the general interest
of the nation.
Objectives of Development Banks
The main objectives of the development banks are
10. To promote science and technology in new areas by providing risk capital,
The long term requirements of business concerns are provided by industrial banks, and the
various long term lending institutions which are created by government. In India these long term
lending institutions are collectively referred as development banks. They are:
DEVELOPMENT
COMMERCIAL BANKS
BANKS
Provide refinancing
Direct finance to customers. facilities to commercial
banks.
Promote savings among the public and help They promote economic
commercial activities. growth of the country.
3. Unlike commercial banks, it does not accept deposits from the public.
institution.
6. It provides financial assistance not only to the private sector but also to the public sector
undertakings.
7. It aims at promoting the saving and investment habit in the community.
8. It does not compete with the normal channels of finance, i.e., finance already made available
by the banks and other conventional financial institutions. Its major role is of a gap-filler, i. e., to
fill up the deficiencies of the existing financial facilities.
9. Its motive is to serve public interest rather than to make profits. It works in the general interest
of the nation.
2.FINANCIAL INSTITUTION
Specialized Financial Institutions in India make an important segment amongst all the
financial institutions in India. The Indian financial institutions are governed under the regulations
of both the state and central governments.
The governments on the other hand use them in structuring the planning and development of the
country.
With the help of these financial institutions, the government takes up projects and tasks in order
to enhance the overall economic scenario of the country. Depending on the economic importance
of the financial organizations, all the financial institutions of India can be divided under
following categories:
In India there are specialized financial institutions in all levels. Both in the Central and State
level there are a wide variety of financial institutions offering various financial services. The
specialized financial institutions in India are not only committed to offer financial services to its
clients but are also devoted to attain certain missions in the steps of economic development of
the country. Some of the major financial institutions of India such as the Industrial Finance
Corporation of India, Industrial Development Bank of India, ICICI and Export Import Bank of
India are the specialized financial institutions in India that work both in the state level and central
level.
Apart from these top-listed financial institutions, there are other financial institutions also that
offer specialized financial services to its clients. These financial institutions are generally
devoted to serve some specific domains such as: small and medium scale industries, sick-
industries, housing, agriculture, railways, shipping, power, roads and others. Small and medium
scale business and agriculture are the two domains for which these specialized financial
institutions have come up with various financial products and services.
Specialized financial institutes like Export Credit Guarantee Corporation of India Ltd and Export
Import Bank of India (EXIM) also offer special financial services to help the exporters with their
business. Apart from offering financial products, these institutions also provide guarantee
products to the export companies.
Financial institutions include banks, credit unions, asset management firms, building societies,
and stock brokerages, among others. These institutions are responsible for distributing financial
resources in a planned way to the potential users.
There are a number of institutions that collect and provide funds for the necessary sector or
individual. On the other hand, there are several institutions that act as the middleman and join the
deficit and surplus units. Investing money on behalf of the client is another of the variety of
functions of financial institutions.
Financial institutions can be categorized as follows:
At the same time, there are several governmental financial institutions assigned to regulatory and
supervisory functions. These institutions have played a distinct role in fulfilling the financial and
management needs of different industries, and have also shaped the national economic scene.
Deposit-taking financial organizations are known as commercial banks, mutual savings banks,
savings associations, loan associations and so on.
Accepting Deposits
Providing Commercial Loans
Providing Real Estate Loans
Providing Mortgage Loans
Issuing Share Certificate
1.Finance companies provide loans, business inventory financing and indirect consumer
loans. These companies get their funds by issuing bonds and other obligations. These companies
operate in a number of countries. On the other hand, there are insurance companies that provide
coverage for a variety of risk factors and they also provide several investment
options. Insurance companies provide loans for a number of purposes and create investment
products.
3.The functions of financial institutions like investment banks are also vital and related to the
investment sector. These companies are involved in a number of financial activities, such as
underwriting securities, selling securities to investors, providing brokerage services, and
fundraising advice.
The Industrial Finance Corporation of India Limited was incorporated on July 1, 1948 by the
Government of India as a tool to overcome the scarcity of long-term finance plans in the
industrial sector. IFCI is the first Development Financial Institution in India.
During the period of independence in 1947, the capital market scenario was horrendous. In spite
of the major requirement of capital market in India, there were no providers for it. To add to the
woes, there were no merchant bankers and underwriting firms. The commercial banks were not
well-accoutered to render long-term financial plans in the industrial sector. Indian finance market
were drowning into a well of failure when the Government of India decided to launch the IFCI
with the aim to provide long-term financial plans to all the sectors of Indian industry. The
Development Financial Institution in India (DFI) was incorporated with the aim to make access
to inexpensive funds easy enough for the industrial sector through Central Bank's Statutory
Liquidity Ratio or SLR. This Statutory Liquidity Ratio enabled the corporate borrowers to take
loans and overtures at a much concessional rates.
During the early 1990s, the Government of India realized that the financial system of the country
needs more flexibility. The Government also felt that The Industrial Finance Corporation of
India Limited needed to access directly to the capital market for any kinds of funds or other
financial issues. At this point of time, that is in 1993, the Government of India took the decision
of transferring IFCI from Statutory Liquidity Ratio to a company that would come under the
Indian Companies Act, 1956.
The main focus of The Industrial Finance Corporation was 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.
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, export promotion, 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:
Capital & intermediate goods industry that includes products such as electronics, synthetic
plastics, synthetic fibers, and miscellaneous chemicals
Service industries that include hotels and hospitals
Consumer goods industry such as textiles, paper, and sugar
Infrastructure sector which involves power generation and telecom services
Basic industries involving products such as cement, iron & steel, fertilizers, basic chemicals
The economic contributions of The Industrial Finance Corporation of India Limited has been
quite large-scale since its establishment. IFCI has sanctioned funds of an amount of ` 462 billion
to 5707 companies and has paid out ` 444 billion in totality. 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.
FOCUS
IFCI has fulfilled its original mandate as a DFI by providinglong-term financial support to all
segments of IndianIndustry. It has also been chiefly instrumental intranslating the Government’s
development priorities intoreality. Until the establishment of ICICI in 1956 and IDBIin 1964,
IFCI remained solely responsible forimplementation of thegovernment’s industrial policy
initiatives. Its contributionto the modernization of Indian industry, exportpromotion, import
substitution, entrepreneurshipdevelopment, pollution control, energy conservation andgeneration
of both direct and indirect employment isnoteworthy. Some sectors that have directly benefitedfrom
IFCI’s disbursals include:
CORPORATE STRATEGY
IFCI has been able to achieve a financial turnaround with the consistent support and cooperation of all its
stakeholders and is now endeavoring to re-position itself
As a part of its organizational strategy, IFCI plans toinduct strategic investor(s) who may provide
besides funds support, business know-how,marketing techniques, technology, clientele, brand
name etc. to achieve scale and scope economiesand provide expansion of the capital and
resources base. In the interim period, IFCI plans to enhanceorganizational value through
better realization of itsNon-performing Assets (NPAs) and unlocking of value of its investment
port-folio including unquoted investments as well as real estate assets.
The present business strategy of IFCI envisages (a)retaining and enhancing its core competence
in longterm lending to industrial and infrastructure sectorsand (b) expanding fee-based
businesses tocapitalize opportunities in Corporate Advisory Services.
Where Sale Notices have been issued(i) by Official Liquidator(ii) by Recovery Officer(iii) Under
Securitization Act 2002(iv) by other Institutions
Where
(i) Recovery Certificates have been issued By DRTs
(ii) Liquidation Proceeding is Pending This section has two parts.
Part A gives the names of Companies where Sale Notices have been issued by theOfficial
Liquidators attached to the High Courts and / orby the Recovery Officers attached to Debt
Recovery Tribunals (DRTs) and / or under Securitization Act 2002.
Part B gives the names of cases where execution proceedings before Recovery Officers of
DRTs are pending and/or cases where liquidation proceedings before Official Liquidators
attached to High Courts are on. To peruse the notices published in respect of cases of Part-A
and to get the details of Company Profile in respect of cases of Part– B, interested buyers may click
the name of the 'Company' listed below.
IFCI Venture Capital Funds Ltd. (IVCF) was originally setup by IFCI as a Society by the
name of Risk Capital Foundation (RCF) in 1975 to provide institutional support to first generation
professionals and technocrats setting up their own ventures in the medium scale sector, under the
Risk Capital Scheme. In 1988, RCF was converted into a company, Risk Capital and Technology Finance
Corporation Ltd. (RCTC), when it also introduced the
Technology Finance and Development Scheme for financing development and commercialization
of indigenous technology. To reflect the shift in the company’s activities, the name of RCTC was
changed toIFCI Venture Capital Funds Ltd. (IVCF) in February 2000.Over the years, IVCF has
provided financial assistance to new ventures, supported commercialization of new technologies.
Service & Products offered by IDBI,
IDBI Bank (Industrial Development Bank of India) was established in 1964 by an Act of
Parliament only to provide credit and other financial facilities for the development of the
fledgling Indian industry. The central government is the owner of this bank and employees will
be called as Central Government staffs. It is one among the public sector banks in India and is a
nationalized bank to be treated on par with SBI and other nationalized banks in accordance with
the notification dated 26th February 2013 by the finance ministry. At present the government
holds 77% stake in IDBI Bank. For the first quarter of the current financial year 2017-18, the
bank reported a net loss of Rs.853 crore compared to a profit of Rs.241 crore during the
corresponding period last financial year. In the fourth quarter of financial year 2016-17, the bank
had reported a loss of Rs.3,200 crore. While the reported loss was lower than the preceding
quarter, bad loans continued to surge. In the quarter ending September 2017 the bank bounced
back with a loss of Rs.198 crore compared to a loss of over Rs.2,000 crore in the previous
quarter. The bank is expected to return to profit in the near future.
It currently has 3,817 ATMs, 1,995 branches, including one overseas branch in Dubai, and 1,382
centers.[citation needed]
The bank has an aggregate balance sheet size of INR 3.74 trillion as on 31 March 2016.[2]
The Present
Today, IDBI Bank is counted amongst the leading public sector banks of India, apart from claiming the
distinction of being the 4th largest bank, in overall ratings. It ispresently regarded as the tenth largest
development bank in the world, mainly in terms of reach. This is because of its wide
network of 509 branches, 900 ATMs
and3 1 9 c e n t e r s . A p a r t f r o m b e i n g i n v o l v e d i n b a n k i n g s e r v i c e s , ID B I h a s s e t
u p institutions like The National Stock Exchange of India (NSE), The National Securities Depository Services
Ltd. (NSDL) and the Stock Holding Corporation of India (SHCIL).
Objectives
The main objectives of IDBI are to serve as the apex institution for term finance for industry in India. Its
objectives include (1) Co-ordination, regulation and supervision of the working of other financial institutions such
as IFCI , ICICI, UTI, LIC, Commercial Banks and SFCs.(2) Supplementing the resources of other financial
institutions andthereby widening the scope of their assistance.(3) Planning, promotion and development of key
industries anddiversifications of industrial growth.(4) Devising and enforcing a system of industrial growth
that conformsto national priorities.
Function
The IDBI has been established to perform the following functions-(1) To grant loans and advances to IFCI, SFCs
or any other financialinstitution by way of refinancing of loans granted by suchinstitutions which are
repayable within 25 year.(2) To grant loans and advances to scheduled banks or state co-operativebanks by way
of refinancing of loans granted by such institutionswhich are repayable in 15 years.(3) 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
(4) To discount or rediscount bills of industrial concerns.
(5) To underwrite or to subscribe to shares or debentures of industrialconcerns.
(6) To subscribe to or purchase stock, shares, bonds and debenturesof other financial institutions.
(7) To grant line of credit or loans and advances to other financialinstitutions such as IFCI, SFCs, etc.
(8) To grant loans to any industrial concern.
(9) To guarantee deferred payment due from any industrial concern.
(10) To guarantee loans raised by industrial concerns in the market or from institutions.
(11) To provide consultancy and merchant banking services in or outsideIndia.
(12) To provide technical, legal, marketing and administrative assistanceto any industrial concern or person for
promotion, management or expansion of any industry.(13) Planning, promoting and developing industries to fill
up gaps inthe industrial structure in India.(14) To act as trustee for the holders of debentures or other
securities.
Subsidiaries
The following are the subsidiaries of IDBI.(1) Small Industries Development Bank of India (SIDBI)(2) IDBI
Bank Ltd.(3) IDBI Capital Market Services Ltd.(4) IDBI Investment Management Company
Capital Structure and Operations
As on September 30,1996, the authorised Capital of IDBI wasRs.2000crores. Issued, subscribed
and paid up share capital was Rs.828.76crores.Reserves were Rs.6309 crores. Loan funds
were Rs.35450 crores. Thetotal outstanding loans, investments and guarantee of IDBI
stood atRs.39,221 crore as on 31st March 1996.
The SIDBI (Small Industries Development Bank of India) is a wholly owned subsidiary of IDBI
(Industrial Development Bank of India), established under the special Act of the Parliament 1988
which became operative from April 2, 1990. SIDBI was made responsible for administering
Small Industries Development Fund and National Equity Fund that were administered by IDBI
before. SIDBI is the Primary Financial Institution for promoting, developing and financing
MSME (Micro, Small and Medium Enterprise) sector.
Besides focussing on the development of the Micro, Small and Medium Enterprise sector, SIDBI
also promotes cleaner production and energy efficiency. SIDBI helps MSMEs in acquiring the
funds they require to grow, market, develop and commercialize their technologies and innovative
products. The bank provides several schemes and also offers financial services and products for
meeting the individual’s requirement of various businesses.
Direct Finance: SIDBI offers Working Capital Assistance, Term Loan Assistance,
Foreign Currency Loan, Support against Receivables, equity support, Energy Saving
scheme for MSME sector, etc.
Indirect Finance: SIDBI offers indirect assistance by providing Refinance to PLIs
(Primary Lending Institutions), comprising of banks, State Level Financial Institutions,
etc. with an extensive branch network across the country. The key objective of the
refinancing scheme is to raise the resource position of Primary Lending Institutions that
would ultimately enable the flow of credit to the MSME sector.
Micro Finance: SIDBI offers microfinance to small businessmen and entrepreneurs for
establishing their business.
1. Small Industries Development Bank of India refinances loans that are extended by the
PLIs to the small-scale industrial units and also offers resources assistance to them.
2. It discounts and rediscounts bills
3. It also helps in expanding marketing channels for the products of SSI (Small Scale
Industries) sector both in the domestic as well as international markets.
4. It offers services like factoring, leasing etc. to the industrial concerns in the small-scale
sector.
5. It promotes employment oriented industries particularly in semi-urban areas for creating
employment opportunities and thus checking relocation of people to the urban areas.
6. It also initiates steps for modernisation and technological up-gradation of current units.
7. It also enables timely flow of credit for working capital as well as term loans to Small
Scale Industries in cooperation with commercial banks.
8. It also co-promotes state level venture funds.
Benefits of SIDBI
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Custom-made – SIDBI policies loans as per the requirements of your businesses. If your
requirement doesn’t fall into the ordinary and usual category, SIDBI would assist funding
you in the right way.
Dedicated Size – Credit and loans are modified as per the size of the business. So,
MSMEs could avail different types of loans custom-made for suiting their business
requirement.
Attractive Interest Rates – It has a tie-up with several banks and financial institutions
world over and could offer concessional interest rates. The SIDBI has tie-ups with World
Bank and the Japan International Cooperation Agency.
Assistance – It not just give provides a loan, it also offers assistance and much-required
advice. It’s relationship managers assist entrepreneurs in making the right decisions and
offering assistance till loan process ends.
Security Free – Businesspersons could get up to INR 100 lakhs without providing
security.
Capital Growth – Without tempering the ownership of a company, the entrepreneurs
could acquire adequate capital for meeting their growth requirements.
Equity and Venture Funding – It has a subsidiary known as SIDBI Venture Capital
Limited which is wholly owned that offers growth capital as equity through the venture
capital funds which focusses on MSMEs.
Subsidies – SIDBI offers various schemes which have concessional interest rates and
comfortable terms. SIDBI has an in-depth knowledge and a wider understanding of
schemes and loans available and could help enterprises in making the best decision for
their businesses.
Transparency – Its processes and the rate structure are transparent. There aren’t any
hidden charges.
Step 1: Recognized consultants empanelled with the SIDBI would prepare the documents
needed. Depending on the requirements and information specified by the MSMEs, the
consultants would prepare a BIM (Basic Information Memorandum). This document
would include all the information related to the rating agencies and banks.
Step 3: In case required, the proposal would be rated by the rating agency which is
approved by the Reserve Bank of India.
a) SIDBI would offer equity or quasi-equity to the existing units that are growth oriented
b) The bank would finance units which are in the service sector
c) It would offer credit to MSMEs for Cleaner Production Processes and Energy Efficient.
Step 5: For other case, the application for the loan would be submitted to the Public-
Sector Banks. SIDBI (Small Industries Development Bank of India) has an MOU
(memorandum of understanding) with the public-sector banks for the issuing loans.
SIDBI would help the entrepreneur at each stage till the loan is finally processed.
MSMEs stands a better chance of availing the loan in time and also could avoid needless
delays.
In 2016, due to a lack of quorum on the Board of Directors, EXIM was not able to provide full
support for American jobs and the U.S. exports that create them. The last year that the Bank was
fully operational was 2014.
The company is offered credit terms so that it can add flexibility to its cash flow and thereby
manage its business more efficiently.
It provides extra time for the goods to clear customs and be resold before you need to pay for the
goods.
Suppliers are ensured payment upon request from the exporter.
The exporter’s working capital cycle is shortened, therefore allowing for increased production
levels.
Exporters can convert a credit sale into a cash sale, thereby freeing up their capital for further
exports.
ASSET FINANCING
Moratorium on principal
Interest and principal monthly
Interest monthly principal on maturity
After independence, in order to improve rural credit, the government and Reserve Bank of India
decided to set up a committee which would take up a study of agricultural credit in India. This
committee was called All India Rural Credit Survey Committee. It was headed by Mr.Gorewalla.
The committee’s recommendations were accepted by RBI and were implemented. Accordingly,
RBI has started two major funds for providing loans to State Governments and also to cooperate
banks. The role of RBI in agricultural credit was appreciated.
National Bank for Agriculture and Rural Development (NABARD) is an apex development
financial institution in India, headquartered at Mumbai with regional offices all over India.[2] The
Bank has been entrusted with "matters concerning policy, planning and operations in the field of
credit for agriculture and other economic activities in rural areas in India". NABARD is active in
developing financial inclusion policy and is a member of the Alliance for Financial Inclusion.[3
With the increasing role of RBI, it was found too difficult to concentrate on agricultural finance.
Even the institution such as Agricultural Refinance Corporation could not provide the required
amount of refinance. A decision was taken to delink agricultural finance from RBI and to set up
a separate institution to provide agricultural finance. In 1981, a Committee to Review
Arrangement For Institutional Credit for Agriculture and Rural Development (CRAFICARD)
was set up under the chairmanship of Mr.Sivaraman. The recommendation of the CRAFICARD
committee was accepted and NABARD came into existence on July 12, 1982.
Capital source for NABARD
The existing organizations such as Agricultural Credit Department, Rural Planning Credit Cell of
RBI, and Agricultural Refinance and Development Corporation were taken over by NABARD.
The authorized capital of NABARD was Rs. 500 crores. The subscribed and paid up capital as
of March 2015 is Rs. 5000 crores out of which Central Government has contributed 4980 Crores
and RBI 20 Crores (source). In addition to this a loan of Rs. 1,200 crores was granted by RBI.
All the loans granted by RBI to various State Governments and State Cooperative banks for
agriculture were transferred to NABARD. The NABARD has been recognized as the apex
institution for agricultural finance. As the name suggests, the bank has been set up not only for
agricultural finance, but also for the development of rural areas.
Objectives of NABARD
The main objects of NABARD are as follows:
Thus, the objects of NABARD can be brought under three major heads:
Credit function.
Development function.
Promotional function.
Main functions of NABARD:
1. NABARD provides refinancing facilities to Commercial banks, State co-operative banks,
Central Co-operative banks, Regional rural banks and Land Development banks.
2. It provides refinancing to agriculture, small scale industries and other village and cottage
industries by lending to commercial banks.
3. It promotes rural industries, small scale and cottage industriesincluding tiny sectors by
providing loans to commercial and co-operative banks.
4. Special assistance is given by the bank for the promotion of small scale, cottage and village
industries under service area approach.
5. The bills of commercial and co-operative banks are discounted to enable them to finance for
agricultural operations.
6. The bank provides funds to State governments for undertaking developmental and
promotional activities in rural areas. In order to promote rural development and to help the
weaker sections, the bank refinances especially regional rural banks which are set up in
backward areas in most of the States.
7. Towards long-term loan, the bank is providing loans to institutionsinvolved in long-term
agricultural loan against guarantee of State government.
8. The bank is also financing research and development of agricultural and rural industries.
9. The bank implements the policy of the Central Government and the RBI with regard to
agricultural credit.
10. Provides finance for promoting non-form activities and employment in non-farm sectors
for the purpose of reducing rural unemployment.
11. It strengthens the co-operative structure in the States by providing loans to both State co-
operative banks and also to Land Development Banks.
12.It promotes minor irrigation projects by financing State Government’s sponsored irrigation
projects.
13. The bank is undertaking inspection work of Co-operative banks and Regional rural banks.
14. The bank has opened branches at all District headquarters by which it co-ordinates the
District development programmes along with the district officials.
15. The bank also helps in the annual credit plan of the commercial banks and co-ordinates the
activities of commercial and co-operative banks at the district level.
16. During natural calamities, such as droughts, crop failure and floods, the bank helps by
refinancing commercial and cooperative banks so that the farmers tide over their difficult period.
Thus, the bank is providing short-term, medium term and long-term loans for agriculture and
rural development
Ever since the setting up of NABARD, there has been a considerable increase in the distribution
of agricultural credit both by commercial and co-operative banks. NABARD has also
strengthened up the working of Regional rural banks.
Thus, we find that the role of RBI in agricultural finance has been not only taken over by
NABARD but it has been discharging it to the atmost satisfaction of all the parties concerned.
Achievements of NABARD
After the setting up of NABARD, there has been considerable increase in the rural finance
and development of small scale and cottage industries. By way of short-term credit, nearly Rs.
4,000 crores has been distributed during 90’s compared to Rs. 1,200 crores during 80’s.
By way of medium term finance, nearly Rs. 400 crores have been provided and they have been
utilized mainly by States affected by natural calamities. In long-term loan, more than Rs. 240
crores have been sanctioned for contributing to the share capital of co-operative institutions.
NABARD has also played a significant role in improving storage facilities for agricultural
commodities in the country. It has also promoted the export of agricultural commodities which
include vegetables and fruits. It has played a supplementary role in sustaining Green Revolution
in the country.
White Revolution and Blue Revolution in the form of increased milk production and fisheries
have also been contributed by the sustained efforts of NABARD. India stands the top most
country in the world in production of dairy milk.
2. To encourage and promote the involvement of internal and external capital sources, in such
enterprises.
3. To motivate pvt ownership of industrial investment and to promote and assist in the expansion
of markets.
1. Providing finance in the form of long-term or medium term loans or equity participation.
4. Providing similar loans in foreign currencies for payment of imported capital equipment and
technical service.
7. Providing financial services like leasing, installment sale and asset credit.
The ICICI sells securities from its own portfolio to the investors whenever it can get a reasonable
price for them. It does so for the dual purpose of revolving its resources for new investments and
for encouraging the investment habit in others and thereby promoting a wide spread distribution
of private industrial securities. Thus, unlike normal investors the ICICI does not retain successful
investments merely because they are profitable.
ICICI assisted manufacturing industries in all sectors, that is, the private sector, the joint sector,
the public sector and the cooperative sector but the major beneficiary was the private sector.
ICICI’s assistance comprised of foreign currency loans, rupee loans, guarantees, and subscription
of shares and debentures. The Corporation showed increasing interest in the development of new
industries in backward regions.
There was a remarkably significant increase in financial assistance by ICICI in recent years.
In 1982, the ICICI gave a new dimension to its merchant banking division by offering to provide
counseling for industrial investment in India to non-resident Indians and persons of Indian origin
living abroad. This is likely to prove not only the least expensive route for technological up
gradation but also a source of foreign currency funds by way of risk capital.
It has set up Venture Capital Funds for the promotion of green field companies and risk capital
investment and joined the other financial institutions in setting up SHCIL, CRISIL and OTC
Exchange of India Ltd. It has recently set up its own bank and a mutual fund like the UTI.
The Corporation’s vision has been extending far beyond its immediate function of funding
industrial projects. It has been looking at all sectors of the economy and wherever a need was
perceived, has designed either a new concept or a new instrument, or even a new institution to
cater to it. In this regard, its development activities have encompassed such diverse areas as
technology, financing, project promotion, rural development, human resources development and
publications.
It has set up ICICI Brokerage Services Limited in March 1995. It is a 100% subsidiary of I-SEC.
It commenced its securities brokerage activities in 1996. It is registered with the National Stock
Exchange of India Limited and The Mumbai Stock Exchange.
ICICI set up ICICI Credit Corporation in 1997, which later renamed as ICICI Personal Financial
Services Limited in 1999. It is offering a comprehensive range of goods and services to retail
customers.
ICICI Capital Services Ltd. was originally set up as SCICI securities Ltd. as a wholly owned
subsidiary of erstwhile SCICI Ltd. in 1994. Its object is providing stock broking services to the
institutional clients and undertaking activities such as underwriting, primary market placements
and distribution, industry and company research etc. It became a wholly owned subsidiary of
ICICI with effect from April 1, 1996.
ICICI has established ICICI bank for performing commercial banking functions in 1994. The
bank offers a wide variety of domestic and international banking services.
Mutual Funds-Meaning and benefits of mutual funds, types of mutual funds, SEBI guidelines
relating to mutual funds