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The Industrial Finance Corporation of India (Ifci)

The Industrial Finance Corporation of India (IFCI) was established in 1948 by the Government of India as the country's first development financial institution. IFCI provides long-term financing to industrial sectors in India to promote industrial development. It focuses on providing medium and long-term credit to industrial projects through activities like rupee and foreign currency loans, underwriting shares and debentures, and guaranteeing machinery imports. Over the years, IFCI has sanctioned over Rs. 462 billion to more than 5,707 companies, contributing significantly to the growth of key industries in India.

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5K views15 pages

The Industrial Finance Corporation of India (Ifci)

The Industrial Finance Corporation of India (IFCI) was established in 1948 by the Government of India as the country's first development financial institution. IFCI provides long-term financing to industrial sectors in India to promote industrial development. It focuses on providing medium and long-term credit to industrial projects through activities like rupee and foreign currency loans, underwriting shares and debentures, and guaranteeing machinery imports. Over the years, IFCI has sanctioned over Rs. 462 billion to more than 5,707 companies, contributing significantly to the growth of key industries in India.

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manumadhu
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© Attribution Non-Commercial (BY-NC)
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THE INDUSTRIAL FINANCE

CORPORATION OF INDIA (IFCI)


Mr Atul Kumar Rai
CEO and Managing Director
INTRODUCTION
•The Government of India set up the IFCI under
IFCI Act in July 1948.
•It is the first development financial institution
in the county to cater to the long-term finance
needs of the industrial sectors.
•The main objective of IFCI is to making
medium & long term credits more readily
available for industrial concerns in India.
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. 
CAPITAL
 The authorized capital of the corporation as
per IFCI Act 1948, was Rs.10 crores. It was
raised to Rs.20 crores by the Amendment Act
1972.
 50% of the share capital is held by the IDBI &
remaining 50% by banks, cooperative banks,
insurance company, investment trusts etc.,
ACTIVITIES

 Direct Financing
 Incidental Activities
 Promotional Activities
DIRECT FINANCING

Rupee loans
Sub loans in foreign currency
Underwriting of and/or direct subscription to the shares & debentures of
public limited companies.
Foreign currency loans raised by industries from foreign institutions
Rupee loans raised by industries from scheduled banks or state co-operative
banks.
Guaranteeing of deferred payments for machinery {imported & indigenous}
INCIDENTAL ACTIVITIES

IFCI has been authorized by Industrial Finance


Corporation ( Amendment) Act, 1982 to undertake
incidental activities.
Undertaking research & surveys for evaluating or dealing
with marketing or investments and undertaking &
carrying on techno-economic studies.
Providing technical & administrative assistance to any
industrial concern for the promotion, management or
expansion of any industry.
PROMOTIONAL ACTIVITIES
 Merchant Banking operations.
 The objective of IFCI in this case has been:
 Fill in the gaps in the industrial infrastructure for promotion & growth of
industries.
 To provide much needed guidance in project identification, formulation,
implementation, operation etc., to the new, tiny, small scale and medium scale
entrepreneurs.
 To improve the productivity of human and material resources; a better deal to the
weaker, underprivileged sections of the society in line with socio-economic
objectives laid down by Government of India.
AREAS OF ASSISTANCE
 Assistance from IFCI single or jointly with other
institutions is available for:
Setting up of new industrial projects.
Expansion of existing units/ diversification into new
lines of activity.
Renovation / rehabilitation / Modernization of
existing units.
Resources are in the form of:
Loans from RBI
Share capital
Retained earnings
Repayment of loan
Issue of bonds
Loans from government
Lines of credit from foreign lending agencies
Commercial borrowings in international capital market.
CONTRIBUTIONS OF IFCI FOR THE
IMPROVEMENT OF INDIAN INDUSTRY
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
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 Rs. 462 billion to
5707 companies and has paid out Rs. 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. 

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