Industrial Development Bank of India (IDBI)

Industrial Development Bank of India (IDBI)

IDBI is an Indian private sector bank providing financial and banking services. It was established in 1964 and provided financial assistance to industrial sectors. IDBI is a development financial institution. It is a subsidiary of Life Insurance Corporation, and Small Industries Development Bank Of India is a subsidiary of the IDBI. In 2005. IDBI was merged with IDBI bank and was categorised as a public sector entity. However, the Reserve Bank of India in 2019 classified it as a private bank. Several national financial institutions, like the Small Industries Development Bank Of India, National Stock Exchange of India, Exim Bank, etc., find their roots in IDBI. 

Small Industries Development Bank Of India

The Small Industries Development Bank Of India is wholly owned by IDBI. It was established as its subsidiary in 1988 by the Act of Parliament and started operating in 1990. The IDBI gave the responsibility of the small industry development fund and national equity fund to the Small Industries Development Bank Of India. The Small Industries Development Bank Of India ( SIDBI ) evolved as a financial institution and worked to promote and develop the MSME sector. 

History of IDBI

The history of development banking can be traced back to the Great Depression in 1930 and Second World War. The damage caused by the destruction created a demand for reconstruction, which led to the establishment of national institutions. Specialised Financial Institutions such as IDBI, NABARD, NHB, and SIDBI were formed to meet the financial requirements in the industrial and agricultural sectors. IDBI was a wholly-owned subsidiary of RBI in 1964, but its charge was taken over by the Union Government of India in 1976. And with this, IDBI became the principal institution for coordinating financial activities for the development of the industrial sector. 

Objective

The objective of the IDBI includes:

• Coordinating, supervising, and controlling the activities of Finacial Institutions like ICICI, LIC, etc
• The Collection of resources for other financial institutions and providing financial assistance
• Planning and promoting key industries to enhance industrial growth
• To build a system that adheres to national priorities

Industrial Development Bank Of India Share Price

The Industrial Development Bank Of India’s Share Price keeps on increasing and decreasing depending on the fluctuations in the market. The current price of IDBI shares is Rs. 48.50 ( 10th February 2022, 3:30 PM ). The IDBI’s bank equity shares are listed on India’s BSE and National Stock Exchange. Till September 2021, the shares held by the Union Government were 45.48%, whereas the Life Insurance Corporation of India had 49.24% of shares. The rest of the shares were held by the non-promoters. 

Branches of Financial Institutions in India

IDBI has a widespread network to facilitate economic activities. The numbers climb to 2095 branches and 3394 ATMs as of 31st December 2020. 

The Small Industries Development Bank Of India Branches extend up to 5 regional offices. And Small Industries Development Bank Of India Branches are 33 in number. Other financial institutions are too spread across the country. 

Industrial Development Bank Of India Functions

IDBI played a crucial role in the pre-reform era in catalysing industrial development in India on a broader level. The Industrial Development Bank Of India’s Functions are as follows:

• The promotion and development of the industries to bridge the gaps between the industrial structure are crucial functions of IDBI
• The preparation and floating of new projects for industrial development is an important activity performed by the IDBI
• Research on market and investment, surveys, and studies to understand the complexity and contribute towards industrial growth
• Purchasing shares that are concerned with industries
• The Coordination of activities performed by other financial institutions
• Extension of technical and administrative support for the expansion of industries
• Offering refinancing facilities to the Industrial Finance Corporation of India (IFCI ), Securities and Futures Commission ( SFC ), and other financial institutions approved by the Government of India
• The IDBI also aids Foreign Exchange Services. The purchase of currencies, deposits outside the country, swaps, etc., are also facilitated by the same

Conclusion 

In short, the IDBI can be explained as the leader who contributes to industrial financing through its innovation and Coordination. The authorised capital of IDBI was raised to Rs. 1000 crore under the amendment act of 1986. The role of IDBI has also been significant in consultation, merchant activities, and trusteeship engagements. Direct industrial assistance in project loans was provided through modernisation schemes, equipment finance schemes, and technical development schemes. Recent years have witnessed the support of IDBI towards the backward areas and small-scale industries. The entire system of the fund and fee-based services fulfils the demand for finance and advisory needs. The Industrial Development Bank of India is the tenth-largest development bank globally.