DEVELOPME
NT BANKS
INTRODUCTION
A Development Bank is a polygonal development
finance institution devoted to improving the social
and monetary development of its associate nations.
Its main emphasis is the welfare of the people. For
example the Asian Development Bank's overarching
goal is to decrease poverty in Asia and the Pacific. It
helps improve the value of people's lives by
providing loans and scientific support for a broad
variety of development activities.
DEFINITION
D.M. MITHANI
“A developed bank may be defined as a financial institution
concerned with
Providing all types financial assistance (medium as well as
long term) to bus
-siness unit in the form of loans, underwriting, investment
and guarantee
operation and development in general and industrial area”
CONCEPT
The concept of development banking originated
during the post Second World War period. The
International Bank for Reconstruction and
Development (IBRD) known as the World Bank and
the International Monetary Fund (IMF) are examples
of development banks at international level.
OBJECTIVE
a) To serve as an agent of development in various sectors, namely,
industry, agriculture and international trade.
b) To accelerate the growth of the economy.
c) To allocate resources to high priority areas.
d) To foster rapid industrialization, particularly in the private sector,
so as to provide employment opportunities as well as higher
production.
e) To develop entrepreneurial skills.
f ) To promote the development of rural areas.
g) To finance the housing, small scale industries, infrastructure, and
social utilities
Functions of development bank
Increase loans and equity investment to its developing associate
countries
for their monetary and social development.
Provides technical help for the planning and implementation of
development
projects and programs and for advisory services.
Promotes and facilitates speculation of public and private capital for
growth
and development.
Responds to request for assistance in coordinating growth policies and
plans
of its increasing countries.
IFCI
It is India’s first DFI.
It was established on 1 july 1948, under the Industrial
Finance Corporation Act as a statutory corporation.
It was set up to provide institutional credit to medium
and large industries.
IDEI
It was established in 1964 by parliament as a wholly
owned subsidiary of the RBI.
In 1976, the bank’s ownership was transferred to the
government of India.
It was accorded the status of the principal financial
institution for coordinating the working of institutions
at state level engaged in financing, promoting and
developing industries.
IIBI
It was set up as a company under the companies act,
1956, in march 1977 by converting the erstwhile
Industrial Reconstruction Bank of India.
It is the only all India financial institution wholly
owned by the government of India.
SIDBI
It was set up in 1990 under an act of Parliament – the
SIDBI act 1989.
The charter establishing SIDBI envisaged SIDBI to be
‘the principal financial institution for promotion,
financing and development of industries in small scale
sector and to coordinate the functions of other
institutions engaged in similar activities.
It is among top 30 development bank of the world.
IDFC
It was set up on the recommendation of the expert
group of commercialisation of infrastructure projects.
It was set up to facilitate the flow of private finance to
commercially viable infrastructure projects.
EXIM Bank
It is wholly owned by the government of India.
It was set up for the purpose of financing, facilitating
and promoting foreign trade in India.
NABARD
It is an apex institution set up for providing and
regulating credit and other facilities for the development
and promotion of agriculture, small scale industries ,
cottage and village industries, handicrafts and other
rural crafts, and other allied economic activities in rural
areas with a view to promoting integrated rural
development and securing prosperity of rural areas and
matters connected therewith or incidental thereto.
It also operates various schemes such as Kisan Credit
Card, Watershed Development scheme, etc.
ICICI
It was among the first development banking the world
to be set up in the private sector.
It w2as formed in 1955 at the initiative of World Bank
and Govt. of India and representative of Indian
Industry.
The principal objective was to create a development
financial institution for proving medium and long
term financing of Indian business.
SIDC
It was established under the companies act 1956, as
wholly-owned undertaking of the state governments.
They act as nodal agencies of state government for
promotion of industrial growth and development of
infrastructure facilities.
There are 28 SIDC’s in the country.
SFC
Presently there are 18 SFC’s operating in their
respective state or union territories, of which 17 were
set up under the SFC’s Act 1951.
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