A Development Financial institution (DFI) may be defined as “a financial institution endorsed or supported by the Government of India primarily to provide development/Project finance to one or more sectors or sub-sectors of the economy. DFIs differentiate their role as providers of the long-term capital needs of the economy in a significant manner. They emphasize…
At the early stage of independence, there were no long-term financing institutions in India. The role of commercial banking at that time was limited to working capital financing on a short-term basis. Therefore, the role of DFIs was to recognize the gaps in institutions and markets in our financial sector and act as a gap-filler…
At the time of independence of India, the role of commercial banking was limited to working capital financing on a short-term basis. Though demand for capital was growing rapidly, there was a lack of providers of capital. The commercial banks of that time were not equipped well enough to provide for long-term capital needs in…
The government, on Friday, announced the interest rates for small savings schemes applicable for the quarterJuly-September 2024. It means the interest rates remain unchanged from those notified for the first quarter March-June 2024. The interest rates applicable to various instruments of Small Savings are as follows. Scheme Interest rate for July-Sept. 2024 Interest rate for…
Small Industries Development Bank of India (SIDBI) set up on 2nd April 1990 under an Act of the Indian Parliament, acts as the Principal Financial Institution for the Promotion, Financing, and Development of the Micro, Small, and Medium Enterprise (MSME) sector as well as for co-ordination of functions of institutions engaged in similar activities. The…
At the initial stage of Indian independence, the Capital Markets were relatively less developed. Though demand for capital was growing rapidly, there was a lack of providers of capital. The commercial banks of that time were not equipped well enough to provide for long-term capital needs in any significant manner. Given this, the Government of…
At the beginning of post-independence, the role of commercial banking in India was limited to working capital financing on a short-term basis, so the thrust of DFIs was on long-term finance to the industry and infrastructure sector in India. The role of DFIs was to recognize the gaps in institutions and markets in our financial…
The Industrial Credit and Investment Corporation of India (ICICI), the first development finance institution in the private sector, came to be set up in January 1955, with the backing and funding of the World Bank. The primary objective of ICICI was to develop small and medium industries in the private sector. After the merger of…
Reserve Bank of India updated the Master Circular on priority sector lending on June 21, 2024, incorporating the following updated instructions/guidelines on priority sector lending(PSL)-target and classification. This is to address regional disparities in the flow of priority sector credit at the district level, it was decided to rank districts based on per capita credit…
The banks in India were governed under the provision of the Indian Companies Act 1913. The act was found inadequate and unsatisfactory to regulate banking companies in India. Many banks have failed due to inadequacy of capital and a need was felt to prescribe a minimum capital requirement for banks. As there was no licensing…