Page 96 - DMGT512_FINANCIAL_INSTITUTIONS_AND_SERVICES

Unit 7: Non-banking Financial Companies

IFCI has founded and developed prominent institutions like: Notes
1. Management Development Institute (MDI) for management training and development
2. ICRA for credit assessment rating
3. Tourism Finance Corporation of India (TFCI) for promotion of the hotel and tourism
industry
4. Institute of Labor Development (ILD) for rehabilitation and training of displaced and
retrenched labor force
5. Rashtriya Gramin Vikas Nidhi (RGVN) for promoting, supporting and developing
voluntary agencies engaged in uplifting rural and urban poor in east and northeast India.

IFCI, along with other institutions, has also promoted:
1. Stock Holding Corporation of India Ltd. (SHCIL)
2. Discount and Finance House of India Ltd. (DFHI)
3. National Stock Exchange (NSE)

4. OTCEI
5. Securities Trading Corporation of India (STCI)
6. LIC Housing Finance Ltd.
7. GIC Grih Vitta Ltd., and

8. Bio-tech Consortium Ltd. (BCL).
IFCI has also set up Chairs in reputed educational/management institutions and universities. A
major contribution of IFCI has been in the early assistance provided by it to some of today's
leading Indian entrepreneurs who may not have been able to start their enterprises or expand
without the initial support from IFCI.

7.4 State Financial Corporations (SFCs)

SFCs are the State-level financial institutions which play a crucial role in the development of
small and medium enterprises in the concerned States. They provide financial assistance in the
form of term loans, direct subscription to equity/debentures, guarantees, discounting of bills of
exchange and seed/special capital, etc. SFCs have been set up with the objective of catalysing
higher investment, generating greater employment and widening the ownership base of
industries. They have also started providing assistance to newer types of business activities like
floriculture, tissue culture, poultry farming, commercial complexes and services related to
engineering, marketing, etc.

IFCI was established to cater to the financial needs of industrial concerns in large scale corporate
and co-operative sectors. Small and medium sized enterprises were outside the purview of IFCI.
To meet the financial needs of small and medium enterprises, the government of India passed
the State Financial Corporation Act in 1951, empowering the State Governments to establish
development banks for their respective regions.
Under the Act, SFCs have been established by State Governments to meet the financial
requirements of medium and small sized enterprises. There are 18 SFCs at present.

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