Professional Documents
Culture Documents
Varsha Rustagi
2016MCOM016
Department of Commerce
INTRODUCTION
• Development banking was started after the World War II. It
provided finance to reconstruct the buildings
and industries which were destroyed in the war.. In a country
like India, the emergence of development banking is a post-
independence phenomenon.
DEFINITION
“Development banks are financial institutions established to lend (loan)
finance (money) on subsidized interest rate. Such lending is sanctioned to
promote and develop important sectors like agriculture, industry, import-
export, housing and allied activities."
MEANING
• Development bank is essentially a multi-purpose financial
institution with a broad development outlook. A development
bank may, thus, be defined as a financial institution concerned
with providing all types of financial assistance (medium as well
as long term) to business units.
Planned Infrastructural
development facilities
Employment Promotional
generation activities
Development
of backward
areas
Role of development banks in the
Indian economy
• Capital Formation
• Support to the Capital Market
• Rupee Loans
• Foreign Currency Loans
• Subscription to Debentures and Guarantees
• Assistance to Backward Areas
• Promotion of New Entrepreneurs
• Impact on Corporate Culture
DEVELOPMENT BANKS IN INDIA
TYPES AND EXAMPLES
Industrial Development Banks :
Objectives of IFCI:
The main objective of IFCI is to 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
by the issue of shares.
Functions of IFCI:
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.
Functions
OBJECTIVE:
It is the Financial Institution for the Promotion, Financing and Development of the Micro,
Small and Medium Enterprise (MSME) sector and for Co-ordination of the functions of
the institutions engaged in similar activities.
FUNCTIONS:
Enterprise promotion
Human resource development
Technology upgradation
Environmental and quality management
Information dissemination
Market promotion
Agricultural Development Banks:
Functions :
• Undertakes monitoring and evaluation of projects refinanced by it.
• NABARD refinances the financial institutions which finances the rural sector.
• It regulates the institution which provides financial help to the rural economy.
• It provides training facilities to the institutions working in the field of rural
upliftment.
• It regulates the cooperative banks and the RRB’s.
ACHIEVEMENTS OF NABARD
The business of Exim Bank is to finance Indian exports that lead to continuity of foreign
exchange for India. The Exim Bank extends term loans for foreign trade.
FUNCTIONS
Undertaking merchant banking functions of companies engaged in foreign trade.
• Providing technical and administrative assistance to the parties engaged in export
and import business.
• Offering buyers’ credit and lines of credit to the foreign governments and banks.
• Financing of export and import of goods and services both of India and of outside
India.
Providing finance for joint ventures in foreign countries
Housing Development Banks: It includes, for example, National Housing
Bank (NHB).
National Housing Bank: The National Housing Bank (NHB) is a state owned bank and
regulation authority in India, created on July 8, 1988 under section 6 of the National
Housing Bank Act (1987).
The headquarters is in New Delhi. The institution, owned by the Reserve Bank of India, was
established to promote private real estate acquisition. The NHB is regulating and re-
financing social housing programs and other activities like research etc. Its objective is
promoting inclusive expansion with stability in housing finance market.
Functions:
• To promote and develop specialised housing finance institutions for mobilising resources
and extending credit for housing.
• To provide refinance facilities to housing finance institutions and scheduled banks
• To provide guarantee and underwriting facilities to housing finance institutions
• To formulate schemes for mobilisation of resources and extension of credit for housing,
especially catering to the needs of economically weaker sections of society
• To provide guidelines to housing finance institutions to ensure their healthy growth
Thankyou
Any Questions?