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    Financial. Institution & IFCI

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    Aditya
    Financial institutions provide funds and infrastructure to transfer resources from those with excess income to those who can productively use them. They include banks, non-banking financial companies, and specialized development institutions. The Industrial Finance Corporation of India (IFCI) was established in 1948 by the government to provide financial assistance and promotional activities for industry. IFCI considers factors like employment, exports, and location when approving loans and investments.

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    Financial. Institution & IFCI

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    Aditya
    3K views18 pages
    Financial institutions provide funds and infrastructure to transfer resources from those with excess income to those who can productively use them. They include banks, non-banking financial companies, and specialized development institutions. The Industrial Finance Corporation of India (IFCI) was established in 1948 by the government to provide financial assistance and promotional activities for industry. IFCI considers factors like employment, exports, and location when approving loans and investments.

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    Financial institutions provide funds and infrastructure to transfer resources from those with excess income to those who can productively use them. They include banks, non-banking financial companies, and specialized development institutions. The Industrial Finance Corporation of India (IFCI) was established in 1948 by the government to provide financial assistance and promotional activities for industry. IFCI considers factors like employment, exports, and location when approving loans and investments.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    3K views18 pages

    Financial. Institution & IFCI

    Uploaded by

    Aditya
    Financial institutions provide funds and infrastructure to transfer resources from those with excess income to those who can productively use them. They include banks, non-banking financial companies, and specialized development institutions. The Industrial Finance Corporation of India (IFCI) was established in 1948 by the government to provide financial assistance and promotional activities for industry. IFCI considers factors like employment, exports, and location when approving loans and investments.

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    of 18

    FINANCIAL

    INSTITUTIONS
    MEANING
    Financial institutions provide means and
    mechanism of transferring resources from
    those who have an excess of income over
    expenditure to those who can make
    productive use for the same.
    ROLE :
     Providing Funds
     Infrastructural Facilities
     Promotional Activities
     Development of Backward Areas
     Planned Development
     Accelerating Industrialization
     Employment Generation
    TYPES :
    Financial Institutions

    Banks Non-Banking Financial Institutions

    Organized Unorganized Organized Unorganised


    Commercial Banks Indigenous Banks
    Cooperative Banks Money Lenders Non-Banking
    Financial Companies
    Seths, Sahukars

    Development Banks Specialized Financial Investment Institutions


    Institutions LIC, GIC, UTI
    1.All India Development Banks
    IDBI, IFCI, ICICI, IDFC, Exim Bank, NABARD
    SIDBI, IRCI (IIBL)
    2. State Level Development Banks
    SFC’s, SIDC’s
    INDUSTRIAL
    FINANCE CORPORATION
    OF INDIA(IFCI)
    IFCI :
    Government of India came forward to set up the
    Industrial Finance Corporation of India. (IFCI) in
    July 1948 under a Special Act. The Industrial
    Development Bank of India, scheduled banks,
    insurance companies, investment trusts and co-
    operative banks are the shareholders of IFCI.
    The Government of India guaranteed the
    repayment of capital and the payment of a
    minimum annual dividend
    MANAGEMENT :
    The Corporation has 13 member Board of Directors.

    Chairman : Appointed by Govt. of India after consulting IDBI.


    12 Directors : Four are nominated by IDBI
    Two by scheduled Banks
    Two by Cooperative Banks
    Two by other financial
    Institutions
    Two outside persons as Directors
    (Expert in the Fields of Industry, Labour and
    Economics)
    Financial Resources :
    1.Share Capital : The IFCI was set up with an authorised
    capital of Rs.10 crores consisting of 20,000 shares of
    Rs. 5,000 each. In March 2003 it was Rs. 1068 crores.

    2.Bonds & Debentures : The bonds and debentures stood


    at figure of Rs. 57.69 crores in 1971 and rose to Rs.
    15366.5 crores as on March 31,2003.

    3. Borrowings : Borrowings from IDBI and Govt. of India


    were Rs. 975.6 crore and total assets Rs.22866 crore on
    March 31,2003
    Criterion for Investments :
    Considerations while selecting a Financial Proposal :

     Importance of project for national economy.


     Employment-oriented and labour-intensive nature
     Export potential of a unit
     Projects located in backward areas
     Projects initiated by new entrepreneurs
     Projects which will help rural areas
     Projects which help in conserving energy
     Projects to be set up in a co-operative sector.
    Industries Eligible Under Direct
    Financing :
    1. Limited companies incorporated in India, in private, public
    or joint sector
    2. Co-operative societies registered in India, engaged in the
    activities related to:
    i) Manufacture, preservation
    ii) Shipping
    iii) Mining
    iv) Hotel Industry
    v) Generation of Electricity
    vi) Transport of Passengers or goods
    vii) Maintenance, repair of machinery or vehicles
    viii) Assembling, repairing or packing of articles
    ix) Fishing
    x) Providing special or technical knowledge
    xi) Research and Development
    Purpose of Direct Assistance :

    Setting up of new industrial projects

    Expansion of existing units or for


    diversification

    For renovation and modernisation


    FUNCTIONS :

     FINANCIAL ASSISTANCE

     PROMOTIONAL ACTIVITIES
    Financial Assistance :
    i. Granting Loans
    ii. Underwriting the issue of industrial securities
    iii. Subscribing shares of public ltd. Companies
    iv. Guaranteeing of deferred payments
    v. Guaranteeing of loans
    vi. Act as agent of the Central Bank
    Promotional Activities :
    i. Development of Backward Areas
    ii. Promotional Schemes
    iii. Subsidy for Adopting Indigenous Technology
    iv. Meeting Cost of Market Studies
    v. Meeting Cost of Feasibility Studies
    vi. Promoting Small Scale and Ancillary
    Industries.
    vii. Revival of Sick Units
    viii. Self-development and Self-employment
    Scheme
    IFCI & Industrial Finance :
    1. Financial Assistance :

    1970-71 : Rs. 32.3 crores


    1995-96 : Rs. 6579.7 crores
    2001-02 : Rs. 778.0 crores
    2002-03 : Rs. 2035.1 crores (161.6% Increase)
    Upto Mar 03 :-
    Total Assistance Sanctioned : 45426.7 crores
    Total disbursements : 44169.2 crores
    2. Product-Wise Assistance :

    1. Direct Finance
    A. Project Finance
    i) Loans : Rupee Loans, Foreign Currency
    ii) Underwriting : Shares, Debentures
    iii) Deferred payment guarantees
    B. Non-Project Finance
    i) Equipment Finance
    ii) Corporate Loans
    iii) Working Capital/short-term loans
    iv) Equipment leasing

    2. Direct Discounting
    3. Loans to and investments in shares/bonds of FIs
    3.Purpose-Wise Assistance :

    S.No. Purpose Sanctions Disbursements


    1. New
    2. Expansion/diversification/acquisition
    3. Rehabilitation
    4. Modernisation /balancing equipment
    5. Working Capital
    6. Others
    TOTAL
    Sector-Wise Assistance :

    Sr. No Sector Sanctions Disbursements

    1. Public
    2. Joint
    3. Co-operative
    4. Private
    TOTAL

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