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DEVELOPMENT
BANKS
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INTRODUCTION
Development banks are special industrial financing
institutions.
These banks are mostly set up after World War II
in both developed and underdeveloped countries.
Development banks do not mobilize savings like
other banks but invest the resources in a
productive manner.
These banks make significant contribution toindustrial
development.
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MEANING OF A
DEVELOPMENT BANK
Development Banks are the institutions engaged
in the promotion and development of industry
,agriculture and other key sectors.
A development bank is an institution hich takesup the !ob of
developing industrial enterprises
from its inception to completion.
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DEFINITION
D."."ithani states that , # A development bank may
be defined as a financial institution concerned ith
providing all types of financial assistance $medium
as ell as long term % to business units.
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FEATURES OF
DEVELOPMENT BANKS
It is a specialized financial institution hich
provides
medium term and long& term lending facilities.
It is a multipurpose financial institution because
besides providing financial help ,it
undertakes promotional activities also.
Development banks provides financial assistance to
both public and private institutions.
The role of a development bank is of gap filler. Development
banks accelerate the rate of groth
through helping in industrialization in specific and
economic development in general.
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The ob!ective of development bank is to serve the
public interest rather than earning profits.
Development banks react to socio&economic needsof
development.
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NEED FOR DEVELOPMENT
BANKS
'. (ay foundations for industrialization.
). "eet capital needs.
*. +eed for promotional activities.
. -elp small and medium sectors.
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FUNCTIONS OF
DEVELOPMENT BANKS
'. inancial gap fillers.
). /ndertake 0ntrepreneurial 1ole.
*. 2ommercial banking business.
. 3oint inance.
4. 1efinance acility.
5. 2redit 6uarantee.
7. /nderriting of 8ecurities.
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LENDING PROCEDURES OF
DEVELOPMENT BANKS
(OPERATIONAL ACTIVITIES)
'. 9ro!ect Appraisal and 0ligibility of Applicant.
). Technical Appraisal.
*. 0conomic :iability.. Assessing 2ommercial Aspects.
4. inancial easibility.
5. "anagerial 2ompetence.
7. +ational 2ontribution.
;. Balancing of various actors.
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'=.(oan Disbursement.
''.ollo /p.
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DEVELOPMENT BANKS IN
INDIA
The foreign rulers in India did not take much
interest in the industrial development of the
country.
The recommendation for setting up industrialfinancing
institutions as made in '
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It as in '
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In '
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The 8tate Industrial Development 2orporations
ere established in the si?ties to promote medium
scale industrial units.
+ABA1D as set up in '
