1. Relevance of Development financial
institution in inDian financial
system.
Prepared by:
Avrohit Gupta
Lalit Aggrawal
Ananya Nigam
Ram Pandey

2.  Development Finance Institutions (DFIs) are
government-controlled institutions that invest
in sustainable private sector projects with the
twofold objective of spurring development in
developing countries while themselves
remaining financially viable.
 Ex: International Bank for reconstruction and
Development (IBRD) also known as World
Bank & International Monetary Fund (IMF)

3.  There is generally a lack of availability of long-
term finance for infrastructure and industry,
finance for agriculture and small and medium
enterprises (SME) development and financial
products for certain sections of the people.
 The role of development finance is to identify
the gaps in institutions and markets in a
country’s financial sector and act as a ‘gap-
filler’.

4.  Industrial Finance Corporation of India Ltd.
(IFCI)
 Industrial Development Bank of India (IDBI)
 Industrial Investment Bank of India Ltd. (IIBI)
 Small Industrial Development Bank of India
(SIDBI)
 Export Import Bank of India (EXIM)
 National Bank For Agriculture & Rural
Development (NABARD)

5.  Set-up in 1948 to provide institutional credit to
medium and large industries.
 Project financing: Medium/Long term credit for
setting up new project, expansion schemes,
financial assistance by way of rupee loans, loans
in foreign currencies, underwriting of direct
subscription of shares/debentures.
 Financial Services and corporate advisory
services.

6. 1) For setting up a new industrial undertaking.
2) For expansion and diversification of existing
industrial undertaking.
3) For renovation and modernisation of existing
concerns.
4) For meeting the working capital requirements
of industrial concerns in some exceptional

7.  Established in 1964 for coordinating the
working of institutions at national level and
state levels engaged in financing, promoting
and developing industries.
 Provides merchant banking & corporate
advisory services as a part of its fee based
activities.
 Provide advice & services for issue
management, private placement of equity/debt
instrument, project evaluation, corporate
restructuring etc.

8.  Direct assistance: helps the industrial sector by granting
project loans, underwriting of and direct subscription to the
industrial securities (shares and debentures), soft loans, and
technical development funds.
 Coordinating functions: coordinates the functions of
financial institutions such as ICICI, IFCI, LIC and GIC, with
respect to industrial development.
 Indirect assistance to small and medium enterprises by
granting loans. It also refinances industrial loans of the
SFC's, SIDCs, commercial banks and RRBs, along with the
billing related to the sale of the indigenous machinery.
 Raising funds from the international money markets.

9.  Set up in 1990, the principal financial
institution for the promotion, financing and
development of industries in the small sector
and to co-ordinate the functions of other
institutions engaged in similar activities.
 An apex institution, SIDBI makes use of the
network of the banks and state financial
institutions.
 Financial Products- Micro finance, venture
capital, project finance, assistance for
technology development, export finance etc.

10.  Credit Guarantee Fund Trust for Micro and
Small Enterprises provides guarantees to banks
for collateral-free loans extended to SME.
 SIDBI Venture Capital Ltd. is a venture capital
company focussed at SME.
 SME Rating Agency of India Ltd. (SMERA)
provides composite ratings to SME.
 Another entity founded by SIDBI is ISARC -
India SME Asset Reconstruction Company in
2009, as specialized entities for NPA resolution
for SME

11.  An apex institution which promotes foreign
trade.
 Creating export capability by arranging
competitive financing at various stages of
export cycle.
 Bank provides export credit on deferred
payment terms on exports of Indian machinery,
manufactured goods and technology services.

12. i) Financing of exports and imports of goods and
services, not only of India but also of the third world
countries;
(ii) Financing of exports and imports of machinery and
equipment on lease basis;
(iii) Financing of joint ventures in foreign countries;
(iv) Providing loans to Indian parties to enable them to
contribute to the share capital of joint ventures in
foreign countries;

13. (v) To undertake limited merchant banking functions
such as underwriting of stocks, shares, bonds or
debentures of Indian companies engaged in export or
import.
(vi) To provide technical, administrative and financial
assistance to parties in connection with export and
import.

14.  NABARD is the apex institution in the country
which looks after the development of the cottage
industry, small industry and village industry,
and other rural industries.
 Co-ordinates the rural financing activities of all
institutions engaged in developmental work at
the field level and maintains liaison
with Government of India, State
Governments, Reserve Bank of India (RBI) and
other national level institutions concerned with
policy formulation

15.  Undertakes monitoring and evaluation of projects
refinanced by it.
 NABARD refinances the financial institutions which
finances the rural sector.
 The institutions which help the rural economy,
NABARD helps develop.
 NABARD also keeps a check on its client institutes.

16.  It regulates the institution which provides
financial help to the rural economy.
 It provides training facilities to the institutions
working the field of rural upliftment.
 It regulates the cooperative banks and the
RRB’s.

17.  First development bank in the world to be set
up in the private sector
 Objective is to provide medium-term & long-
term financing to Indian business.
 ICICI Securities & Finance Co. Ltd.
 ICICI Venture Funds Management Co. Ltd.
 ICICI Prudential Life Insurance
 ICICI Home Finance Co. Ltd.
 ICICI Investment Management Co. Ltd.