Industrial Finance Corporations Of India (i.f.c.i.)
Assist in setting up new projects as well as in modernization of existing industrial concerns in medium and large scale sector;
Assist projects under co-operatives and in backward areas.
The primary role of IFCI is to provide direct financial assistance on medium and long term basis to industrial projects in the corporate and co-operative sectors. Over the years, the scope of activities of the corporation has widened. The objectives of the corporation are stated below.
(a) To provide long and medium-term credit to industrial concerns engaged in manufacturing, mining, shipping and electricity generation and distribution.
(b) The period of credit can be as long as 25 years and should not exceed that period.
c) To grant credit to a single concern up to a maximum amount of rupees one crore. This limit can be exceeded with the permission of the government under certain circumstances;
(d) guarantee loans and deferred payments;
The main functions of I.F.C.I. are as under:-
i) Granting loans and advances for the establishment, expansion, diversification and modernization of industries in corporate and co-operative sectors.
ii) Guaranteeing loans raised by industrial concerns in the capital market, both in rupees and foreign currencies.
iii) Subscribing or underwriting the issue of shares and debentures by industries. Such investment can be held up to 7 years.
iv) Guaranteeing credit purchase of capital goods, imported as well as purchased within the country.
v) Providing assistance, under the soft loans scheme, to selected industries such as cement, cotton textiles, jute, engineering goods, etc.
vi) Providing technical, legal, marketing and administrative assistance to any industrial concern for the promotion, management and expansion of the industrial concern.
vii) Providing equipment (imported or indigenous) to the existing industrial concerns on lease under its equipment leasing scheme.
viii) Procuring and reselling equipment to eligible existing industrial concerns in corporate or co-operative sectors.
ix) Rendering merchant banking services to industrial concerns.
In 1995-96, 67% of the total financial assistance distributed by IFCI was in the form of rupee term loans, while foreign currency loans accounted for approximately 17% of total financial assistance. Thus the two types of assistance accounted for a total of 84% of the total financial assistance by IFCI. The remaining 16% of financial assistance was in the form of underwriting, direct subscription, guarantees and equipment leasing.
by: govindam
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