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IIBI (Industrial Investment Bank of India) was one of India’s finest institutions for financial investments. This organisation was owned by the government of India. This institution was founded in 1971, and at that time, the IIBI headquarters in India was situated in Kolkata (West Bengal). Well, the main aim to set up such an organisation was to rehabilitate or restore the sick industries of India because, at that time, the conditions of some of the industries situated in India were declining, and the scope of proper industrialization in India was also gradually exhausting.
Brief History of IIBI
The Indian Government-owned IIBI was established in 1971 by resolving the Companies Act of India, Section 617. The IIBI headquarters in India was situated in Kolkata. Furthermore, the firm used to operate in New Delhi, Mumbai, Chennai, Bengaluru, Guwahati, and Ahmedabad, considered the most developed cities in the country. The Industrial Reconstruction Corporation of India Ltd was founded in 1971 to rehabilitate ill industrial enterprises. It was reconstituted as the Industrial Reconstruction Bank of India in 1985 under the IRBI Act of 1984. Well, it was a much-needed step for the betterment of the small-scale industries and India’s declining industrial sectors.
At that time, the clients of IIBI were Dr. Morepen, Clutch Auto Limited, Videocon, Great Threads, JSW Ispat, and LML Motors. But over some time, the functions of IIBi were not clear to the people and the industrialists, which led to the institution’s downfall. After this downfall, a merger of IIBI with the Industrial Development Bank of India and the Industrial Finance Corporation of India was explored in 2005. However, due to some of the ramifications, this merger will not occur because the agencies have refused to allow it. This was a very bad decision for the existence of IIBI. This was one of the main reasons which led to the shut down of the IIBI in the years 2006
Moreover, IIBI headquarters in India was in Kolkata, and it was the sole branch of the institution which operated as of the reports of 2011. But later on in the year 2012, in the financial budget of India, it was declared that all the operations of IIBI would be shut down across India. This was the official and final decision for IIBI.
IIBI Objectives: The Motto of The Organisation
IIBI was established for the betterment of the industrial sector of India. It was essential for the development of the industrial sector of India, which was about to decide the future of the nation in the upcoming years. Well, the institution has a variety of features and services, which are as follows –
- Equipment plays a vital role in the function of industry. Therefore, to help the industries buy different types of equipment for their better operations, IIBI also offered the companies equipment loans.
- The institution also offered Short-duration non-project asset-backed financing, working capital, and other short-term loans to companies. This assisted the industries in rapid growth.
- The IIBI also offered equity subscription asset credit to the industries.
- IIBI also made investments in Capital Market and Money market instruments. This helped them get a higher yield of profits and helped the industries financially.
- One of the main IIBI objectives was to provide term-loan assistance for project finance. This helps the industries a lot in the rapid growth of the sector.
What made IIBI Close its Operations all over the Country?
According to sources, the DFI’s insolvency was caused by many non-performing assets (NPAs) it acquired from its former incarnation, the Industrial Reconstruction Bank of India (IRBI), whose goal was to nurture ailing enterprises. It was a full-fledged development bank with sufficient operational freedom and autonomy.
Conclusion
From the data mentioned earlier, it is 100% clear that IIBI played a crucial role in the development of the industrial sector of India, which is one of the main IIBI objectives. Some of the NPA’s (Non-Performing Assets) of IIBI led the company to shut down its operations in many places. But various measures were taken to let this happen, such as the organisation of the merger with IDBI. Also, The non-performing assets of IIBI were assigned to Deloitte & Touche. But some consequences led to the shut down of the institution in 2012. But it helped a lot of industries during its operational tenure for their betterment.
