Navdeep Kaur is teaching live on Unacademy Plus
Banking and Financial Institutions With MCQs IDBI, EXIM Bank By Navdeep Kaur
IDBI Bank is an Indian government-owned financial service company, formerly known as Industrial Development Bank of India, headquartered in Mumbai, India. It was established in 1964 by an Act of Parliament to provide credit and other financial facilities for the development of the fledgling Indian industry. IDBl Bank is on a par with nationalized banks and the SBI Group as far as government ownership is concerned. It is one among the 27 commercial banks owned by the Government of India. IDBl bank is considered as government of India owned bank. It is currently 10th largest development bank in the world in terms of reach. It has an authorised capital of 3000 cr.
History Industrial Development bank of India (IDBI) was constituted under Industrial Development bank of India Act, 1964 as a Development Financial Institution (DFI) and came into being as on July 01, 1964 as a wholly owned subsidiary of RBl. In 1976, the ownership of IDBI was transferred to the Government of India and it was made the principal financial institution for coordinating the activities of institutions engaged in financing, promoting and developing industry in India. It was regarded as a Public Financial Institution in terms of the provisions of Section 4A of the Companies Act, 1956. It continued to serve as a DFI for 40 years till the year 2004 when it was transformed into a Bank. Industrial Development Bank of India Limited: In response to the felt need and on commercial prudence, it was decided to transform IDBl into a Bank. For the purpose, Industrial Development bank (transfer of undertaking and Repeal) Act, 2003 [Repeal Act] was passed repealing the Industrial Development Bank of India Act, 1964. In terms of the provisions of the Repeal Act, a new company under the name of Industrial Development Bank of India Limited (IDBI Ltd.) was incorporated as a Govt. Company under the Companies Act, 1956 on September 27, 2004. Thereafter, the undertaking of IDBI was transferred to and vested in IDBI Ltd. with effect from October 01, 2004. In terms of the provisions of the Repeal Act, IDBI Ltd. has been functioning as a Bank in addition to its earlier role of a Financial Institution.
Merger of IDBI Bank Ltd. with IDBI Ltd. Towards achieving the faster inorganic growth of the Bank, IDBI Bank Ltd., a wholly owned subsidiary of IDBl Ltd. was amalgamated with IDBI Ltd. in terms of the provisions of Section 44A of the Banking Regulation Act, 1949 providing for voluntary amalgamation of two banking companies. The merger became effective from April 02, 2005 Change of name of IDBI Ltd. to IDBI Bank Ltd.: In order that the name of the Bank truly reflects the functions it is carrying on, the name of the Bank was changed to IDBl Bank Limited and the new name became effective from May 07, 2008 upon issue of the Fresh Certificate of Incorporation by Registrar of Companies, Maharashtra. The Bank has been accordingly functioning in its present name of IDBI Bank Limited Narsimham Committee: In order to make the IDBI's coordinating role more effective, the Narsimham Committee (1991) has suggested that the IDBl should give up its direct financing function and perform only promotional apex and refinancing role in respect of other institutions like SFCs and SIDBI. The direct lending function should be entrusted to a separate finance company especially set up for this purpose.
Management IDBI Bank is a Board-managed organisation. The responsibility for the day-to-day management of operations of the Bank is vested with the Chairman & Managing Director, 2 Deputy Managing Directors and 10 Executive Directors. Subsidiaries of IDBI Bank IDBI Capital Market Services Limited (ICMS) IDBI Intech Limited (IIL) IDBI Asset Management Limited (IAML) IDBI MF Trustee Company Limited (IMTCL) DBI Trusteeship Services Ltd (ITSL)
Role of IDBI As an apex development bank, the IDBI's major role is to co-ordinate the activities of other development banks and term-financing institutions in the capital market of the country. Providing technical and administrative assistance for promotion, management and expansion of industry thus performing promotional and development functions Direct Assistance: The IDBI grants loans and advances to industrial concerns. The bank guarantees loans raised by industrial concerns in the open market from the State Co-operative Banks, the Scheduled Banks, the Industrial Finance Corporation of India (IFCI) and other notified, financial institutions. Indirect Assistance: Providing refinancing facilities to the IFCI, SFCs and other financial institutions approved by the government. IDBI subscribes to the shares and bonds of the financial institutions and thereby provide supplementary resources Coordinating the activities of financial institutions for the promotion and development of industries IDBI is the leader, coordinator and innovator in the field of industrial financing in our country. Its major activity is confined to financing, developmental, co-ordination and promotional functions. Planning, promoting and developing industries with a view to fill the gaps in the industrial structure by conceiving, preparing and floating new projects.
Functions performed by IDBI That the IDBI has shown its particular interest in the development of small-scale industries is demonstrated by the setting up of the Small Industries Development Fund (SIDF) in May 1986, the National Equity Fund Scheme (NEFS) in 1988, and the Voluntary Executive Corporation Cell (VECC) for providing support in the nature of equity to tiny and small-scale industries engaged in manufacturing, cost not exceeding Rs. 5 lakhs. The scheme is administrated by the IDBl through nationalised banks The IDBI has also introduced the single window assistance scheme for grant of term-loans and working capital assistance to new, tiny and small-scale enterprises. As per data available, IDBI has extended about one-third of total industrial assistance to small-sector alone. The scope of business of the IDBI has also been extended to cover consulting, merchant banking and trusteeship activities
The Export-lmport Bank of India, commonly known as the EXIM bank, was set up on January 1, 1982 to take over the operations of the international finance wing of the IDBl and to provide financial assistance to exporters and importers to promote India's foreign trade. It also provides refinance facilities to the commercial banks and financial institutions against their export-import financing activities. 1. Financing of export and import of goods and services both of India and of outside India 2. Providing finance for joint ventures in foreign countries 3. Undertaking merchant banking functions of companies engaged in foreign trade 4. Providing technical and administrative assistance to the parties engaged in export and import business.
Capital: The authorised capital of the EXIM Bank is Rs. 200 crore and paid up capital is Rs. 100 crore, wholly subscribed by the Central Government. The bank can raise additional resources through (i) Loans/grants from Central Government and Reserve Bank of India; (ii) Lines of credit from institutions abroad; (ii) Funds raised from Euro Currency markets; (iv) Bonds issued in India.
5. Offering buyers' credit and lines of credit to the foreign governments and banks 6. Providing advance information and business advisory services to Indian exports in respect of multilaterally funded projects overseas. During the year 1994-95, the EXIM Bank introduced the 'Clusters of Excellence' programme for up-gradation of quality standards and obtaining ISO 9000 certification in various parts of the country. Signed MOU with EBRD The Bank also entered into framework cooperation agreement with European Bank for Reconstruction and Development (EBRD) for acquiring advance information on EBRD funded projects in order to enter into co-financing proposals with EBRD in Eastern Europe and CIS
With a view to promote exports, EXIM Bank has introduced the following three schemes: 1. Production Equipment Finance Programme 2. Export Marketing Finance 3. Export Vendor Development Finance Over the period, expansion /diversification programme has claimed the maximum share (54.3%) of EXIM Bank's sanctions, followed by new projects, (33.2%) and modernisation /acquisition of equipment (12.5%).
SIDBI Mission History "To facilitate and strengthen credit flow to MSMEs and address both financial and developmental gaps in the MSME eco-system"April 2, 1990 under an Act of Small Industries Development Bank of India (SIDBI), set up on Indian Parliament, acts as the Principal Financial Institution for the Promotion, Financing and Development of the Micro, Small and Medium Enterprise (MSME) Vision To emerge as a single window for meeting the financial and developmental needs of the MSME sector to make it strong, vibrant and globally competitive, to position SIDBI Brand as the preferred and customer friendly institution and for enhancement of share holder wealth and highest corporate values through modern technology platform sector and for Co-ordination of the functions of the institutions engaged in similar activities.
Important functions performed by of SIDBl include: 1. To initiate steps for technological up-gradation and modernisation of existing units. 2. To expand the channels for marketing the products of SSI sector in domestic and international markets. 3. To promote employment oriented industries especially in semi-urban areas to create more employment opportunities and thereby checking migration of people to urban areas. The SIDBI's financial assistance to small-scale industries is channelised through the existing credit delivery system comprising State Financial Corporation, State Industrial Development Corporations, Commercial Banks, and Regional Rural Banks.
Thank you Rate and review the course Recommend the course to your friends https://unacademy.com/user/navclasses/
Banking and Financial Institutions With MCQs IIBI State Finance Corporations By Navdeep Kaur
Working of SFCs: The government of India passed the State Financial Corporation Act in 1951 and made it applicable to all the States. The authorised Capital of a State Financial Corporation is fixed by the State government within the minimum and maximum limits of Rs. 50 lakh and Rs. 5 crore and is divided into shares of equal value which were taken by the respective State Governments, the Reserve Bank of India, scheduled banks, co-operative banks, other financial institutions such as insurance companies, investment trusts and private parties. The shares are guaranteed by the State Government. The SFCs can augment its fund through issue and sale of bonds and debentures, which should not exceed five times the capital and reserves at Rs. 10 Lakh