1. INDUSTRIAL FIANANCE CORPORATION OF INDIA
By:
Vaibhav Agarwal
Asst. Prof.
SOM
BBDU, Lucknow
UNIT 3
Business Organisation
BBA 1st Year
2. The Industrial Finance Corporation of India Limited was incorporated on July 1, 1948 by the
Government of India.
IFCI was established to overcome the scarcity of long-term finance plans in the industrial sector.
IFCI is the first Development Financial Institution in India.
The Corporation provides medium and long-term credits to industrial concerns in India.
Any public limited company or co-operative society incorporated and registered in India which is
in the manufacturing, preservation or processing of goods, or in the shipping, mining or hotel
industry or in the generation or of distribution of electricity or any other form of power, is eligible
for financial assistance.
INTRODUCTION
3. During the period of independence in 1947, the capital market scenario was terrible.
In spite of the major requirement of capital market in India, there were no providers for it.
To add to the problems, there were no merchant bankers and underwriting firms.
The commercial banks were not well-equipped to render long-term financial plans in the
industrial sector.
Indian finance market were in great trouble when the Government of India decided to
launch the IFCI with the aim to provide long-term financial plans to all the sectors of
Indian industry.
HISTORY
4. The Development Financial Institution in India (DFI) was incorporated to make inexpensive funds
easily available for the industrial sector through RBI’s Statutory Liquidity Ratio or SLR.
This Statutory Liquidity Ratio enabled the corporate borrowers to take loans at a much concessional
rates.
During the early 1990s, the Government of India realized that the financial system of the country
needs more flexibility.
The Government also felt that IFCI Ltd. needed to contact directly the capital market for any kinds
of funds or other financial issues.
So in 1993, the Government of India transferred IFCI from Statutory Liquidity Ratio to a company
registered under the Indian Companies Act, 1956.
HISTORYAND FORMATION
5. IFCI implemented Government of India plannings to ensure financial benefits into services.
IFCI carried out all the responsibilities regarding Government's industrial policy initiatives till the
establishment of ICICI in 1956 and IDBI in 1964.
It made a significant contribution to the modernization of Indian industry, export promotion, import
substitution, pollution control, energy conservation and rendering direct and indirect employment.
Some sectors that have directly benefited from IFCI include:
Agro–based industry (textiles, paper, sugar).
Service industry (hotels, hospitals).
Basic industry (iron & steel, fertilizers, basic chemicals, cement).
Capital & intermediate goods industry (electronics, synthetic fibers, synthetic plastics,
miscellaneous chemicals) and Infrastructure (power generation, telecom services).
It has reputed clients namely Ranbaxy Laboratories, Jaypee Group, Lanco, Emaar, Adani Group, JSW
energy, Bhushan Power and Steel etc.
FUNCTIONS AND ACTIVITIES
6. The economic contributions of The Industrial Finance Corporation of India Limited has been quite
large-scale since its establishment.
IFCI has sanctioned funds of an amount of Rs. 462 billion to 5707 companies and has paid out
Rs. 444 billion in totality.
The business entrepreneurs have got immense help from IFCI during starting a business or
expanding the business.
IFCI has been a great helping hand to the entire industrial sector in India and most importantly it
was the only support at the time of urgency of funds.
FUNCTIONS AND ACTIVITIES
