Industrial Finance Corporation of India At the time of independence in 1947, India's capital market was relatively under-developed. Although there was significant demand for new capital, there was a dearth of providers. Merchant bankers and underwriting firms were almost non-existent. And commercial banks were not equipped to provide long-term industrial finance in any significant manner.
It is against this backdrop that the government established The Industrial Finance Corporation of India (IFCI) on July 1, 1948, as the first Development Financial Institution in the country to cater to the long-term finance needs of the industrial sector. The newly-established DFI was provided access to low-cost funds through the central bank's Statutory Liquidity Ratio or SLR which in turn enabled it to provide loans and advances to corporate borrowers at concessional rates. This arrangement continued until the year 1990s when it was recognized that there was need for greater flexibility to respond to the changing financial system.It was also felt that IFCI should directly access the capital markets for its funds needs.It is with this objective the constitution of IFCI was changed in 1993 from a statutory corporation to a company under the Indian Companies Act,1956.Subsequently the name of the company was also changed to 'IFCI Limited ' with effect from October 1999. IFCI has fulfilled its original mandate as a DFI by providing long term financial support to all segments of Indian Industry.It has also beeb chiefly instrumental in translating the government's development priorities into reality.Until the establishment of ICICI in 1956,IFCI remained solely responsible for implementation of the government's industrial policy initiatives.Its contribution to the modernization of Indian Industry,export promotion,import substitution,enterpreneurship development,pollution control,energy conservation and generation of both direct and indirect employment is noteworthy