3. Profile- introduction
Type -Non-Banking Finance Company in the public
IFCI has seven subsidiaries and one associate.
Services- financial support for the diversified growth
of Industries. The financing activities such as
airports, roads, telecom, power, real estate,
manufacturing, services sector and such other allied
IFCI Ltd. was set up in 1948 as a Statutory
IFCI became a Public Limited Company
registered under the Companies Act, 1956 in
IFCI became a Government controlled company
of 55.53% by Government of India on December
IFCI has been increased to 51.04% and IFCI has
become a Government Company under Section
2(45) of the Companies Act, 2013.
5. Services provided
The primary business of IFCI is to provide
medium to long term financial assistance to the
manufacturing, services and infrastructure
Other businesses including broking, venture
capital, financial advisory, depository services,
IFCI was one of the promoters of (NSE),
(SHCIL), (TCOs) and social sector institutions
like (RGVN), (MDI) and (ILD).
1. The corporation grants loans and advances to
2. Granting of loans both in rupees and foreign
3. The corporation underwrites the issue of stocks,
bonds, shares etc.
4. The corporation can grant loans only to public
limited companies and co-operatives but not to
private company and partnerships.
Head office- Delhi.
Regional offices- Bombay, Kolkata, Chennai,
Chandigarh, Hyderabad, Kanpur and Guwahati.
Branches- Bhopal, Pune, Jaipur, Cochin,
Bhubaneshwar, Ahmedabad, Patna and Bangalore.
The IFCI is managed by a Board of Directors,
headed by a Chairman, who is appointed by the
Government of India, in consultation with RBI. The
chairman holds his position for a period of 3 years,
subject to extension.
Of the 12 directors, 4 are nominated by the IDBI,
three of whom are experts in the fields of industry,
labour and economics and the fourth is the General
Manager of the IDBI. The remaining 8 directors are
Two directors are nominated for the term of 4 years
by each of the following scheduled banks, co-
operative banks, insurance companies and
investment companies making up 8 directors.
11. Work undertaken
Advisory committee- The Corporation has six
important advisory committees, one each dealing
with textile, sugar, chemicals, engineering, Jute
Repayment of Loan: The loans are granted
against mortgage of fixed assets and not against
raw material or finished goods. Usually a
borrowing concern will not declare a dividend of
more than 6%. Though the duration of loan is 25
years, yet the average period of repayment does
not exceed 12 years. The repayment of loan
starts after second or third year.
12. Work undertaken
The Rate of Interest: The effective rate of interest
on rupee loan is 10.25% p.a. and 10.75% p.a. on
sub loans in foreign currencies. The rate of
interest charged from the industries located in
the notified or less developed areas is 8.5% p.a.
In the first place, the rate of interest which the
corporation charged was extremely high.
Secondly, there was a great delay in sanctioning
loans and in making the amount of the loans
Thirdly, the ‘corporation’s insistence on the personal
guarantee of managing directors in addition to the
mortgage of property was considered wrong In the
last two decades the corporation had entered into
new lines of activity, viz, underwriting debentures
and shares and guaranteeing of deferred payment in
respect of imports from abroad of plant an
equipment by industrial concerns and subscribing to
stocks and shares of industrial concerns directly.