SPECIALSED FINANCIAL INSTITUONS IFCI SIDBI ICICI UTI SIDCS

SPECIALSED FINANCIAL INSTITUONS • IFCI • SIDBI • ICICI • UTI • SIDC’S • IIBIL • SFC’S • IDBI

Financial Institution-wise Disbursement in India

IFCI- Industrial finance Corporation of India Establishment The Company was Incorporated on 1 st July, at New Delhi. 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 engaged, or proposes to engage itself, in the manufacture, 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. The Industrial Financial corporation Act, 1948 was amended to enable private limited companies to seek financial assistance from the Corporation. In 1987, the Company was converted into a company known as Risk Capital & Technology Finance Corporation, Ltd. The other subsidiaries are IFCI Financial Services Ltd. , IFCI Investors Services Ltd. and IFCI Custodial Services Ltd. The name of the Company has been changed from The Industrial Finance Corporation of India Ltd. to IFCI Ltd. w. e. f. 27 th October, 1999.

Objects The main object of Industrial Finance Corporation of India Limited is to provide financial assistance to large-scale industrial units particularly at a time when the normal banking accommodation is inadequate and not forthcoming to assist these industrial units. Industrial enterprises, organized on the basis of proprietary or private limited company basis, cannot take loans from this corporation. Only the public limited companies are eligible to take loans from it.

Functions The main functions of Industrial Finance Corporation of India Limited are as follows: To grant medium and long-term loans ranging between Rs. 30 lakhs to Rs. 2 crores to large-sized industrial units which are repayable within a period of 25 years. To guarantee loans raised by the industrial units which are repayable within a period of 25 years. To underwrite the issue of stocks, shares, debentures or bonds b industrial units but must dispose of such securities within 7 years. To issue debentures. To accept public deposits up to Rs. 10 crores for a period of five years only. To act as an agent for the Central Government and for the World Bank in respect of loans sanctioned by them to industrial units. To guarantee deferred payments by importers of capital goods, who are able to obtain this concession from foreign manufacturers. Miscellaneous: (i) To provide technical guidance to industrial units as to finance (loans), (ii) To guarantee loans in foreign currency. (iii) To examine utility of loans granted to industrial units, (iv) To guarantee loans raised from scheduled banks and State Co-operative Banks.

The Industrial Finance Corporation or India is managed by a board of directors consisting of 13 members in all, both nominated and elected. The head of the board of directors is called chairman appointed by the Central Government with the consultation of board of directors for a period of three years only. Besides this board of directors, there is also a central committee consisting of five members in all, including president.

Financial Resources The main financial resources of Industrial Finance Corporation of India Ltd. are as follows: Share Capital: The authorized capital of the corporation is Rs. 1, 000 corers divided into 2 lakhs shares of Rs. 5, 000 each. Its paid-up capital on 31 st March, 1997 was Rs. 352. 81 crores. Debentures: The corporation is also authorized to issue debentures and bonds. But their total amount should not exceed ten times of its paid-up share capital plus reserve funds. Loans: The Corporation has the power to borrow funds (loans) from Industrial Development Bank of India. Foreign investment Institutions, Central Government and Reserve Bank of India. Public Deposits: The Corporation can accept public deposits for a maximum period of five years. Further, the amount of public deposits cannot exceed Rs. 10 crores. Reserve Fund: It is another sources of finance of the Corporation. Foreign Currency Loans: The Corporation can also accept loans in foreign currency with the prior approval of the central government, such as, loans from International Bank and other International Financial Institutions. Review of Progress (Operations) The Corporation is granting loans to large-sized industrial units and industrial cooperative units. The amount of assistance varies from Rs. 30 lakhs to Rs. 2 crores for a period not exceeding 25 years. The assistance extended by the corporation has been to widely dispersed among all industries, such as, power generation, telecom services, textiles, hotels, petroleum refining, iron and steel, cement, ports, sugar etc. Further, the assistance to any one industry has not exceeded 15% of the total outstanding assistance. Besides providing financial assistance, the corporation is also providing underwriting services, technical guidance, modernization assistance etc

ICICI-Industrial Credit and Investment Corporation of India The Bank was Incorporated on 5 th January at Baroda. ICICI Bank was promoted by ICICI and erstwhile SCICI Ltd. and received the Certificate for Commencement of Business on 24 th February. It does banking business of all kinds. It was founded as an institution to provide quality banking services using state-of-the-art technology. - The Bank has established a well diversified branch network with 24 branches in 15 centres covering 12 states. The bank set up a fully computerised environment with the State-of-the-art technology at all offices continuously upgrading its strong systems and procedures with special emphasis on risk management. ICICI Bank became the first Indian bank to list on the New York Stock Exchange with its 5 -million American depository shares issue generating a demand book 13 times its size at. 2 billion. ICICI, ICICI Capital Services and ICICI Personal Financial Services amalgamated with us with effect from May 3, 2002. The Appointed Date for the merger specified in the Scheme of Amalgamation, which was the date of the amalgamation for accounting purposes under Indian GAAP, was March 30, 2002. The amalgamation was approved by the High Court of Judicature at Bombay vide its order dated April 11, 2002 and by the High Court of Gujarat at Ahmedabad vide its order dated March 7, 2002 2010 --ICICI Bank has increased deposit rates on select maturities. The bank has raised the interest rate on deposits maturing in 270 days to less than one year by 25 basis points to 5. 75 per cent for deposits of Rs 15 lakh to Rs 1 crore.

SIDBI was established on April 2, 1990. The Charter establishing it, The Small Industries Development Bank of India Act, 1989 envisaged SIDBI to be "the principal financial institution for the promotion, financing and development of industry in the small scale sector and to co-ordinate the functions of the institutions engaged in the promotion and financing or developing industry in the small scale sector and for matters connected therewith or incidental thereto. SIDBI retained its position in the top 30 Development Banks of the World in the latest ranking of The Banker, London. As per the May 2001 issue of The Banker, London, SIDBI ranked 25 th both in terms of Capital and Assets

SIDBI- Business Domain The business domain of SIDBI consists of small scale industrial units, that contribute significantly to the national economy in terms of production, employment and exports. Small scale industries are the industrial units in which the investment in plant and machinery does not exceed Rs. 10 million. About 3. 1 million such units, employing 17. 2 million persons account for a share of 36 per cent of India's exports and 40 per cent of industrial manufacture. In addition, SIDBI's assistance flows to the transport, health care and tourism sectors and also to the professional and self-employed persons setting up small-sized professional ventures

SIDBI's Assistance in NER under SFMC: While the cumulative micro credit provided in NER stood at Rs 903 lakh at the end of FY 06, the table below reflects the spurt in this activity in the last three years: The above assistance was routed through nineteen MFls with around 60, 000 beneficiaries. In addition to the above disbursement, a grant support of Rs 155. 25 lakh has been sanctioned to select MFls for developing their institutional capacities and bringing about financial sustainability.

SIDBI- Functions q q q Channels of Assistance SIDBI's financial assistance to small scale sector have three major dimensions: Indirect assistance to primary lending institutions (PLIs); Direct assistance to small units; and Development and Support Services q q Indirect Assistance SIDBI's Schemes of indirect assistance envisages credit to SSIs through a large network of 913 PLIs spread across the country with a branch network of over 65000. The assistance is provided by way of refinance, bills rediscounting, and resource support in the form of short term loans/Line of Credit (Lo. C) in lieu of refinance, etc. q q Direct Assistance The objective behind SIDBI's direct assistance schemes has been to supplement the efforts of PLIs by identifying the gaps in the existing credit delivery mechanism for Small Scale Industries. Direct assistance is provided under several tailor made schemes through SIDBI's 41 Regional/Branch offices spread across the country.

Development And Support Services q The Bank extends development and support services in the form of loans and grants to different agencies working for the promotion and development of SSIs and tiny industries. Over the years, the initiatives of SIDBI under promotional and developmental activities have crystallized into the following important areas: Enterprise Promotion with emphasis on Rural Industrialization Human Resource Development to suit the SSI sector needs Technology Up gradation Quality and Environment Management Marketing and Promotion and Information Dissemination. q q q

SIDC’s In order to accelerate industrial development various states have to set up industrial Development Corporations. Andhra Pradesh and Bihar were the first states to set up such corporations in 1960. Most of the states have set up such institutions at present. At present there are 28 SIDC’s working in India. q These Corporations are registered under Companies Act, 1956. They are wholly owned by state Govt. q

IDBI: Industrial Development Bank of India The Industrial Development Bank of India (IDBI) was established on July 1, 1964 under an Act of Parliament as a wholly owned subsidiary of the Reserve Bank of India. In 16 February 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 the country. Although Government shareholding in the Bank came down below 100% following IDBI’s public issue in July 1995, the former continues to be the major shareholder (current shareholding: 52. 3% Narasimam committee recommends that IDBI should give up its direct financing functions and concentrate only in promotional and refinancing role. But this recommendation was rejected by the government. Latter RBI constituted a committee under the chairmanship of S. H. Khan to examine the concept of development financing in the changed global challenges. This committee is the first to recommend the concept of universal banking. It recommended to harmonise the role of development financing and banking activities by getting away from the conventional distinction between commercial banking and developmental banking.

IDBI- Functions Debt syndication - Syndication of long term loan (Rupee loans as well as Foreign Currency loans), working capital loans, non-fund based limits etc. Debt Syndication can be in form of vanilla loans or structured loans, bonds/debentures etc. Equity syndication - Syndication of equity funds by way of strategic investment, private placement including with private equity funds, preferential allotment, Qualified Institutional Placement (QIP) etc. Public Issues / Right Issues - managing Public Issues/Right Issues through IDBI's subsidiary viz. , IDBI Capital Market Services Ltd. (ICMS). Merchant appraisals - Appraisal of projects including new projects, expansion, modernization, amalgamation/merger schemes which aids the companies to take a decision for investment. Merchant appraisals are also carried out for various projects in infrastructure sector for qualifying in the bidding process. Structuring financial instruments for arranging resources overseas through External Commercial Borrowings (ECB)s, Foreign Currency Convertible Bonds (FCCBs), American Depository Receipts (ADR) and Global Depository Receipts (GDR) and from domestic market in form of Structured Loan as well as equity instruments like bonds/debentures, preference shares, convertible bonds/debentures (fully/partly), instruments with/without warrants, equity shares etc.

Arranging funding for overseas acquisitions - several corporate aspire to acquire units abroad to achieve their global business plans and require funds to acquire the stake in the units to be acquired. SSD arranges for such funds through its strong relationship with all banks and financial institutions. Acting as an Initial Public Offer (IPO) monitoring agency - As per guidelines of Securities and Exchange Bureau of India (SEBI), any IPO of the size more than Rs. 500 crore requires a financial institution to certify the end use of funds on semi annual basis. Offering advisory and other services for Mergers/Acquisitions - Advising companies in their plans of mergers/acquisitions including identifying target companies, undertaking financial due diligence, working out the financial projections, structuring of purchase consideration etc. Any other advisory/facility of similar nature.

UTI- Unit Trust Of India Unit Trust of India was created by the UTI Act passed by the Parliament in 1963. For more than two decades it remained the sole vehicle for investment in the capital market by the Indian citizens. In mid- 1980 s public sector banks were allowed to open mutual funds. The real vibrancy and competition in the MF industry came with the setting up of the Regulator SEBI and its laying down the MF Regulations in 1993. UTI maintained its preeminent place till 2001, when a massive decline in the market indices and negative investor sentiments after Ketan Parekh scam created doubts about the capacity of UTI to meet its obligations to the investors. This was further compounded by two factors; namely, its flagship and largest scheme US 64 was sold and re-purchased not at intrinsic NAV but at artificial price and its Assured Return Schemes had promised returns as high as 18% over a period going up to two decades

SFC’s- State Financial Corporations State Financial Corporation (SFC) extends financial assistance for setting up industrial units in Small & Medium Scale, Service enterprises in the different states. The Corporation extends finance basically through two products the Term Loans and the Working Capital Term Loans.