Development Finance Institution: Role, Features, Classification, Evolution | Commerce

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Development finance institution-
An institution
Endorsed or supported by government of india
Primarily to provide development/ project finance
To one or more sectors or sub-sectors of the economy


The basic stress is on long-term finance and support for activities to the sectors of the economy where the risks may be higher that may not be feasible for commercial banks to finance them.
So the role is not just long term financing but more of development of significant sectors of our economy for hastening growth.
These DFI are also known as Development banks.
After independence, the role of commercial banking was limited to working capital financing on short term basis so thrust of DFIs was on long term finance to industry and infrastructure sector in India.
India’s first DFI was operationalised in 1948 and it set up State Financial corporations (SFCs) at the state level after passing of the SFCs act, 1951, succeeded by the development of industrial Finance corporation of India (IFCI) -1st July 1948.

Chapters:
0:00 Development Finance Institution
2:42 Role of DFIs in Indian Economy
4:25 Features of Development Banks
6:16 Classification of DFIs
7:10 Functions of Development Banks
10:33 Evolution of DFIs in India
12:31 Summary
13:50 Questions About Development Finance Institution
#developmentfinanceinstitution #roleofdfisinindianeconomy #featuresofdevelopmentbanks #classificationofdfis #functionsofdevelopmentbanks #evolutionofdfisinindia #questionsaboutdevelopmentfinanceinstitution #testprep


Specialized development financial institutions (DFIs),
such as, Industrial Finance Corporation of India (IFCI),
Industrial Development Bank of India (IDBI),
National Bank for Agriculture and Rural Development (NABARD),
National Housing Board (NHB) and
Small Industry Development Bank of India (SIDBI),
with majority ownership of the RBI were launched to meet the long-term financing needs of industry and agriculture in India for driving growth in our economy post-independence.

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