and industrial finance Though industries get finance from commercial banks, the quantum and the term will be very much limited generally. Commercial banks lend for short term only, as they get only short-term deposits from the public. Further lending to industries is only a fragment of the total lending by the banks. Hence, there is a need and urgency of establishing long-term credit facilities to industries.The institutional set-up in India for financing and promoting industries are as follows .
. Institutional Set-up: All-India Level Institutions Industrial Finance Corporation of India (IFCI) Industrial Credit and Investment Corporation of India (ICICI) Industrial Development Bank of India (IDBI) State Level Institutions State Financial Corporations (SFCs) State Industrial Development Corporation (SIDCs) . . All-India Level Institutions: .
Industrial Finance Corporation of India (IFCI) This was first in the chain of establishment of financial corporations to provide financial assistance for industrial development. This was established on July , under the Act of the Parliament. IFCI provides assistance to the industrial concerns in the following ways: i) Long-term loans; both in rupees and foreign currencies. ii) Underwriting of equity, preference and debenture issues.
iii) Subscribing to equity, preference and debenture issues. iv) Guaranteeing the deferred payments in respect of machinery imported from abroad or purchased in India; and v) Guaranteeing of loans raised in foreign currency from foreign financial institutions. Financial assistance of IFCI can be availed by any Limited Company in the public, private or joint sector, or by a co- operative society incorporated in India, which is engaged or proposes to be engaged in the specified industrial activities. Such financial assistance will be available for the setting up of new industrial projects and also for the expansion, diversification, renovation or modernisation of existing ones.
The IFCI also provides financial assistance on concessional terms for setting up industrial projects in - - Banking industrially less developed districts in the States or Union Territories notified by the Central Government, The IFCI raises its resources by way of (a) issue of bonds in the market;