Development Finance Institutions
The Need of DFIs
Classification of DFIs
|All India DFIs||Special DFIs||Investment Institutions||Refinance Institutions||State Level DFIs|
ICICI ceased to be a DFI and converted into a Bank on 30 March 2002.
IDBI was converted into a Bank on 11 October 2004.
IFCI Venture Capitalist Fund
Tourism Finance Corporation of India.
Union Trust of India.
General Insurance Corporation.
|National Housing Board.
|State Financial Corporation.
State Industrial Development Corporations.
All India Development Finance Institutions
|IFCI was the first DFI to be setup in 1948.||It was setup in January 1995.||The IDBI was initially set up as a Subsidiary of the RBI. In February 1976, IDBI was made fully autonomous.||SIDBI was setup as a subsidiary of IDBI in 1989.|
|With Effect from 1 July 1993, IFCI has been converted into Public Limited Company.||With effect from April 2002, ICICI has been converted into a Bank.||The IDBI was designated as apex organisation in the field of Development Financing. However, it was converted in a bank wef Oct 2004.||The SIDBI was designated as apex organisation in the field of Small Scale Finance.
The Union Budget of 1998-99 proposed the delinking of SIDBI from IDBI.
|The key function of IFCI was; granting long-term loans(25 years and above); Guaranteeing rupee loans floated in open markets by industries; Underwriting of shares and debentures; Providing guarantees for industries.||The key functions of ICICI were; to provide long term or medium term loans or equity participation; Guaranteeing loans from other private sources; providing consultancy services to industry.||The key functions of IDBI were; it provides refinance against loans granted to industries; it subscribed to the share capital and bond issues of other DFIs; it also acted as the coordinator of DFIs at all India level.||The key function of SIDBI was; to provide assistance to small scale units; initiating steps for technological up gradation and modernization of SSIs; expanding the marketing channel for the Small Scale Industries product; promotion of employment creating SSIs.|
|IFCI was a public sector DFI.||The ICICI differed from IFCI and IDBI with respect to ownership, management and lending operation. ICICI was a Private sector DFI.||It was a Public sector DFI.|
|The UTI was setup on Nov 1963 after Parliament passed the UTI Act.||LIC was setup in 1956 after the insurance business was nationalised.||The GIC was formed by the central government in 1971.|
|The objective of UTI was to channel the savings of people into equities and corporate debts. The flagship scheme of the UTI was called Unit Scheme 64.||The objective of LIC is to provide assistance in the form of term loans; subscription of shares and debentures;resource support to financial institutions and Life insurance coverages.||The GIC had four subsidiaries; National Insurance Co; New India Assurance; Oriental Insurance; and United India Insurance.|
|In 2002, the Union Cabinet had decided to split UTI into UTI 1 and UTI 2 as a result of the prolonged crisis in UTI.||The General Insurance Nationalisation Amendment Act, 2002, has delinked the GIC from its four subsidiaries.|
Doctoral Scholar in Economics & Senior Research Fellow, CDS, Jawaharlal Nehru University