Development Bank is a bank established by the Reserve Bank of India to provide basic monetary facilities to the industrial sector of the country. Medium and long term finance is provided by the development bank to the industries and agriculture sector.They provide financial assistance for the public and private sector industries. Development Banks are special industrial financing Institutions
Objectives of Development Banks
- Accelerating the economic development of the country by providing necessary financial resources.
- To establish employment opportunities in the country.
- To strengthen the position of capital market in the country.
- Eliminating regional inequality and imbalance through development.
- To Promote and development of small scale industries.
- Promotion of foreign trade in India.
List of important development banks in India:
National Bank for Agriculture and Rural Development (NABARD)
National Bank for Agriculture and Rural Development works in the field of credit for agriculture and other activities in rural areas of India. NABARD was established on the recommendations of B. Sivaramman Committee on 12 July 1982 to implement the National Bank for Agriculture and Rural Development Act 1981. The bank has been entrusted with “matters concerning policy, planning, and operations in the field of credit for agriculture and other economic activities in rural areas in India”. Its headquarter is located in Mumbai.
Small Industries Development Bank of India (SIDBI)
Small Industries Development Bank of India was established on April 2, 1990 as a premier financial institution for the promotion, financing and development of the Micro, Small and Medium Enterprises (MSME) sector. Its headquarter is in Lucknow. SIDBI is a bank, which works to provide business loans to micro, small and medium ie MSME businessmen.
Industrial Development Bank Of India (IDBI)
Industrial Development Bank of India (IDBI) was established on 1st July, 1964. Company’s headquarters is located in Mumbai. This bank provides financial assistance directly to large and medium industrial units. This bank was a subsidiary bank of the Reserve Bank till 1976. In 1976 it was separated from the Reserve Bank and its ownership was taken over by the Government of India. On October 1, 2004, the erstwhile IDBI was converted into a banking company – IDBI Ltd.
Export and Import Bank of India (Exim Bank)
EXIM Bank was established on January 01, 1982 by the Government of India under the Export-Import Bank of India Act 1981. This bank mainly provides loans for exports from India. Exim Bank’s services include technology import, development of exportable products, export marketing, pre-shipment, post-shipment and overseas investment support. Exim bank is fully owned by government of india
Bhartiya Mahila Bank
The bank was inaugurated on 19 November 2013 in Mumbai by the contemporaneous Prime Minister Manmohan Singh and UPA Chairperson Sonia Gandhi in the presence of Finance Minister P. Chidambaram. It is the first public sector bank in which all the members of the board of directors are women. The purpose of establishing this bank was that women could get loans for their favorite household chores as well as small business. The headquarter of the bank is in Delhi. India was the third country, after Pakistan and Tanzania, to have a bank exclusively to benefit women
Micro Units Development Refinance Agency
Mudra Bank was started in India on 8th April 2015. The objective of Mudra Bank is to bring young, educated and trained entrepreneurs into the mainstream by helping them. It has been established under the SIDBI. Under the Pradhan Mantri Mudra Yojana, the Government of India has arranged Mudra loans to help the small businessmen of the country so that they can be helped in meeting the capital related expenses as well as operating expenses. Through this loan, loans up to a maximum of Rs 10 lakh can be taken for service sector units, small industries, small manufacturing units, vegetable or fruit vendors, repair shops, etc.
Types of Mudra Loan Products
There are three types of mudra loan schemes, namely Tarun, Kishor, and Shishu.
- Shishu : Under this scheme, a loan of up to Rs 50,000 is given.
- Kishor : Loans above Rs 50,000 and less than Rs 5 lakh are given under this scheme.
- Tarun : Loans above Rs 5 lakh and less than Rs 10 lakh are given under this scheme.