development bank- mithun
TRANSCRIPT
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DEVELOPMENTBANKS
DEVELOPMENTBANKS
DEVELOPMENT
BANKS
DEVELOPMENT BANKS
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INTRODUCTION
A Development Bank is a development financeinstitution 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'soverarching goal is to decrease poverty in Asiaand the Pacific. It helps improve the value of
people's lives by providing loans and scientificsupport for a broad variety of developmentactivities.
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DEFINITION
A developed bank may be defined as a
financial institution concerned with providing alltypes financial assistance (medium as well aslong term) to business unit in the form of loans,underwriting, investment and guarantee
operation and development in general andindustrial area
D.M. MITHANI
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CONCEPT
Concept arisen in many countries after the second world war.
In under-developed the need was much more due to the large numberof organizational & financial problem inherent in the process ofindustrialization
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.
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OBJECTIVE
To serve as an agent of development in various sectors, namely, industry,agriculture and international trade.
To accelerate the growth of the economy.
To allocate resources to high priority areas.
To foster rapid industrialization, particularly in the private sector, so as to provideemployment opportunities as well as higher production.
To develop entrepreneurial skills.
To promote the development of rural areas.
To finance the housing, small scale industries, infrastructure, and social utilities
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Functions Of
Development Bank
Increase loans and equity investment to its developingassociate countries for their monetary and social development.
Provides technical help for the planning and implementation ofdevelopment projects and programs and for advisory services.
Promotes and facilitates speculation of public and private capitalfor growth and development.
Responds to request for assistance in coordinating growthpolicies and plans of its increasing countries.
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Classification of Development Banks in India
1 All India Development FinancialInstitutions
2 The State level Financialinstitutions
3The insurance companies
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Industrial Finance Corperation
of India (IFC
I) It is Indias first DFI.
It was established on 1st July 1948, under
the Industrial Finance Corporation Act as astatutory corporation.
It was set up to provide medium and long
term credit for Industrial concerns in India.
It was converted into a limited company on
1st July 1993
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Function Of IFCI
Financial Assistance
Setting up of newindustrialundertaking
Expansion ordiversification ofexisting
Modernization orrenovation of
existing, etc.
Promotional Activates
Discoversopportunities forpromoting newenterprise
Providing guidancethrough specializedagencies inidentification,preparation,implication of projects
etc.
Helps in acceleratinggrowth & reducingregional industrial &income disparities
Financial Services
Corporatecounseling forfinancial
reconstruction
Assistance insettlement ofterms & conditionswith foreigncollaboration
Revival of sick unit
Financing of riskyprojects
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IDBI It was established in 1964 by parliament as a wholly owned
subsidiary of the RBI.
In 1976, the banks ownership was transferred to the government ofIndia.
It was accorded the status of the principal financial institution forcoordinating the working of institutions at state level engaged in
financing, promoting and developing industries. It is currently 4th largest bank In India and 10th largest development
bank in the world in terms of reach with 1228 ATMs, 725 branchesand 486 centers.
Some of the institutions built by IDBI are National Stock Exchange of India (NSE),
Export-Import Bank of India (Exim Bank,
Small Industries Development bank of India (SIDBI), Entrepreneurship Development Institute of India.
National Securities Depository Services Ltd (NSDL)
Stock Holding Corporation of India (SHCIL),
Credit Analysis & Research Ltd, etc
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Functions
To co-ordinate the activities of other institutions providing term finance toindustry and to act as an apex institution
To provide refinance to financial institutions grating medium & long termfinancing to industry
To provide refinance to scheduled banks or c0-p banks
To provide refinance for export credits granted by banks
To provide technical and administrative assistances for promoting, Mgmt &growth of industry
To undertake market surveys and techno-economic studies in the industry
To grant direct loans and advances to industrial concerns, etc.
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IIBIL or IRBI
IRBI was established on March 20, 1985 under Indianindustrial Reconstruction Bank Act 1984 as a result ofreconstituting Indian industrial Reconstruction Corporation.
The basic aim of establishing IRBI was to revive sick and
closed industrial units and to act as prime loan areconstruction agency.
IRBI has been rechristened as industrial investment Bank ofIndia Ltd (IIBIL) with effect from March 27, 1997.
The main Objective of IRBI is to assist in reconstruction andrehabilitation of industrial unit which lead to closed down, orwere likely to close down by rendering financial assistances
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Function of IRBI
It identifies the problems/weaknesses in the technical, financial andadministrative fields of the sick units and gives expert advice forremedial action.
It provides technical and managerial guidance either through its own
staff or by procuring suitable personnel from the market
It acts as a catalyst in procuring assistance from banks, financialinstitutions and other government agencies.
It advises the management on product mix and allied constructionassistance for the sick/closed units during the year.
The bank helps units in finding the solution of labour-managementproblems.
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SIDBI
It was set up in 1990 under an act of
Parliament the SIDBI act 1989.
The charter establishing SIDBI envisagedSIDBI to be the principal financial
institution for promotion, financing and
development of industries in small scale
sector and to coordinate the functions ofother institutions engaged in similar
activities.
It is among top 30 development bank of
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Functions
It renders equity type of assistance to new promoters,women and ex-service under National Equity Fund.
It provides assistance to the voluntary organizations
working for development upliftment of under privilegedwomen
It also provides technical support to small scale sectorfor promotion, development and growth.
It also extends financial support to NSIC and SIDCsfor the purchase of material an marketing of SSIproducts and for financing hire-purchase and leasingactivities
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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.
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NABARD
It is an apex institution set up for providing andregulating credit and other facilities for thedevelopment and promotion of agriculture, smallscale industries , cottage and village industries,
handicrafts and other rural crafts, and other alliedeconomic activities in rural areas with a view topromoting integrated rural development andsecuring prosperity of rural areas and mattersconnected therewith or incidental thereto.
It also operates various schemes such as KisanCredit Card, Watershed Development scheme,etc.
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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.
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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 SIDCs in the country.
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SFC
Presently there are 18 SFCs operating in
their respective state or union territories, of
which 17 were set up under the SFCs Act
1951.
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THANK YOU
Mithun Abraham