idbi.seminar.doc

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ACM-903

Seminar Topic

On

INDUSTRIAL DEVLOPMENTBANK OF INDIA(IDBI)

Submitted To

Submitted By

Dr.P.D.SAINIAnuradha Agarwal

Department of Account and Law GroupM.Com IVthSem.

Faculty of CommerceRoll.No. 102502

DAYALBAGH EDUCATIONALINSTITUTE

(DEEMED UNIVERSITY)


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Dayalbagh, Agra

2011

Introduction to IDBI

The Industrial Development Bank of India (IDBI) was established on July 1,

1964 under an Act of Parliament as a wholly owned subsidiary of the Reserve

Bank of India. The Industrial Development Bank of India Limited

commonly known by its acronym IDBI is one of India's leading public sector

banks and 4th largest Bank in overall ratings. RBI categorised IDBI as "other

public sector bank".It was established in 1964 by an Act of Parliament to

provide credit and other facilities for the development of the fledgling Indian

industry. It is currently the tenth largest development bank in the world in terms

of reach with 1512 ATMs, 909 branches and

621 centers. Some of the institutions built by

IDBI are The National Stock Exchange of

India (NSE), The National Securities

Depository Services Ltd. (NSDL) and the Stock Holding Corporation of India

(SHCIL) IDBI BANK , as a private bank after government policy for new

generation private banks.

On 16 February 1976, the ownership of IDBI was transferred to the

Government of India and it was made principal financial institution for

coordinating the activities of institutions engaged in financing, promoting and

developing industry in the country. Although Government shareholding in the

Bank came down below 100% following IDBIs public issue in July 1995, the

former continues to be the major shareholder (current shareholding: 72%).

During the four decades of its existence, IDBI has been instrumental not only in

establishing a well-developed, diversified and efficient industrial and
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institutional structure but also adding a qualitative dimension to the process of

industrial development in the country.

Finance Source of IDBI

The main source of idbi are:-

Share Capital

Reserve

Bonds

Debenture Issues

Deposit from companies

Borrowing from RBI

Borrowing from Government of India

Objective of IDBI

The objective of idbi is to provide financial assistance and coordinate the

working of institutions engaged in financing Promoting and developing

industries. Thus it is an apex development banks.

It not only lend to industry but also to other financial institution like SFCs and

SIDBI by way of subscription to capital and refinancing.


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Functions of IDBI

Corporate functions

Project Finance Scheme:

Under the Project Finance scheme IDBI Bank provides finance to the corporates

for projects. The Bank provides project finance in both rupee and foreign

currencies for Greenfield projects as also for expansion, diversification and

modernization. IDBI Bank follows the Global Best Practices in project appraisal

and monitoring and has a well-diversified industry portfolio.

Infrastructure Finance:

IDBI Bank has been actively participating in structuring and financing of

infrastructure projects in the areas of power, telecom, roads, seaports, railways

and logistics as well as Special Economic Zones. The Bank has also taken

initiatives in funding modernization of airports, besides part-financing

development of international airports and seaports under the Public-Private

Partnership route. The Bank is also a member of the Core Committee of the

Government set up for finalisation of the Ultra Mega Power Projects. IDBI

Bank interacts with Government and other stakeholders and market participants,

on policy and operational issues, facilitating smooth flow of funds to

infrastructure sector.

Working Capital finance:

Working Capital facility is provided to the industry to finance day-to-day

production & sales. For production, funds are generally required for purchase of

raw materials, stores, fuel, for payment of labour, power charges, for storing

finished goods till they are sold out & for financing the sales by way of sundry

debtors / receivables. Cash Credit facility is granted to the customers to bridge


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working capital gap. The Bank also provides short term loan facility for a period

of up to 1 year for the purpose of bridging temporary cash flow mismatches

arising due to various reasons like non-realization of receivables in time, routine

capex etc.

SME Finance

IDBI Bank has been actively engaged in providing a major thrust to financing

of SMEs. With a view to improving the credit delivery mechanism and shorten

the Turn Around Time (TAT), IDBI Bank has developed a special business

model to serve the SMEs in India. The Bank has set up 24 City SME Centres

(CSCs) across India in Mumbai, Delhi, Kolkata, Chennai, Bangalore,

Hyderabad, Pune to name a few. These CSCs are the Bank's hubs while

dedicated SME desks have been set up in several branches across these cities.

These branches serve as front offices for sales delivery and customer service.

Sulabh Vyapar Loan

Eligible Segments Traders and Service Sector

Facility Fund Based :Overdraft, , Term loan, Bills Discounting

Non Fund Based: Bank Guarantee and Letter of credit

Loan Amount Minimum: Rs.5 lacs and Maximum: Rs 500 lacs.

Tenor TL: upto to 5 years.

PERSONAL BANKING


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Savings account

The Super Savings Account is a complete financial package that provides with

easy access to a persons money and complete banking convenience too. It

offers a whole range of options for optimal management of your money. Which

means, with Super Savings Account, one not only save his money but also make

it grow.

So apart from the basic benefits of a savings account, bank offer various options

for faster transfer of funds, options to pay bills or tax online and options to grow

money at attractive interest rates in the savings account. All these features are

offered for a minimum balance of Rs 5,000.

International Debit Card

Family Account

Quick Money Transfer

Easy Payments Bank on the Move

Profit from your Account

Value Added Services

Travel and Gift Solutions

Power kidz

With the growing focus on the Kids segment and its requirements, IDBI Bank

realized the importance of introducing a product specifically catering to this

market. Now-a-days, parents start saving money for their children right from the

day they are born. So, to support this thought IDBI has designed this POWER

KIDZ A/C

It is a piggy bank for the Kids that will not just keep their money safe but
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provide an interest on the same, allow them to take out money when required,

make smart purchases by way of exclusive debit card, teach them to operate

their account in a better and convenient way and also advise them from time totime about better investment options.

Current account services

Roaming Current Account

A Current account for every business

IDBI Bank Current Accounts not only gives the flexibility of banking anytime,

anywhere, but also allows to save more money while doing business across the

country.

Roaming Current Account from IDBI Bank comes packed with a host of

services and facilities that makes banking convenient and hassle-free. With

services such as multi-city and multi-branch banking, electronic funds transfers,

national clearing in selected cities, 24x7 cash withdrawals from ATMs, Internet

Banking, Phone Banking and SMS Banking, a person is assured of faster

remittances and collection of funds at competitive rates. Whats more, extended

IDBI Banking hours and Sunday Banking, all this to simplify banking for

customer!

Features

Make payments to vendors in different cities without any costs

Receive payments from customers without any charge deducted from the

amount

Do all the banking right from wherever a person travel

Most importantly, maintain better relations with the vendors and

customers.


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One can open a Current Account (Basic Roaming Current Account) with only

Rs 10,000. He has to maintain an average quarterly balance of Rs 10,000. But

this is nothing compared to a host of services and facilities that will make your

current account work more effectively and efficiently.

FIXED DEPOSIT SERVICES

Suvidha Fixed Deposits

IDBI Bank Suvidha Fixed Deposits have always stood for safety, credibility and

attractive rates of interest. Whats more,the interest rates are among the highest

in the industry so that one get the benefit of high rates of return on savings.

These deposits have been further packed with the following features :

Anytime access of deposits

Deposits across tenures of 15 days to 10 years

Various Options to suit the needs.

Monthly Quarterly Income Plans

For those who seek regular incomes

A great option for people who require interest income at regular intervals. The

interest income will be credited automatically into savings account at the

interval (Monthly/Quarterly) specified by the person. The deposit is

automatically renewed on maturity so that the person doesnt lose interest for a

single day. What's more one can book Fixed Deposit with only Rs. 10,000.


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Recurring Deposit

Ideal for those who want to save a fixed sum every month

This type of deposit helps add to the savings at complete convenience. one can

start saving any amount from Rs. 100 to Rs. 1 lakh every month. The amount as

decided by the person, will be deducted every month from savings account.

Further, there is no Tax deducted at source on these deposits and also no

charges for executing the standing instructions.

Overdraft against Fixed Deposit

Tide over your urgent cash requirements without breaking your Fixed

Deposit

This option allows one to continue earning the higher rate of interest on an FD

and at the same time, one can meet his monetary requirements. An overdraft of

upto 90% of the FD/Multiple FDs held with the bank, will be setup in your zero

balance savings account. The overdraft can be availed against an FD amount of

Rs. 50,000 or higher at very competitive rates. Moreover, the overdraft is first

given on the FD earning least interest so that interest payout is minimized.

IDBI Super Shakti Account for Women

Understanding the specific requirements of the customers, we at IDBI Bank

have introduced a special Savings Account for Women, which we have coined

Super Shakti. Not only this, along with this account it offer one Zero Balance

Savings Account absolutely free for her child below the age of eighteen years.

The Account offers a host of features, which include:


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Free Transactions at other Bank ATMs.

An account opening balance of just Rs.1000

A Zero balance account for your child below the age of 18 years.

Debit Card Free for the first year.

A free Personalised/Customised PAP Cheque Book.

Quarterly Account Statement

Phone Banking

Mobile Banking

Free Statement by e-mail

Locker services at a concessional rate

Investment advisory services.

Free local personalized Cheque Book

LOANS AND ADVANCES

HOME LOANS

One can avail of the Home Loans for constructing a home, purchasing

a ready built house/flat, residential plot and even for re-financing

existing loans one may have availed from other banks or housing

finance companies.

Advantages

Maximum Funding

Flexibility of choosing between Floating or Fixed interest rate

Attractive rate of interest

Simple documentation

Legal and technical assistance


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Balance transfer facility

Features

1. Tenor of a home loan can be up to 25 years for a resident individual

whereas for NRIs the maximum tenure is 15 years subject to

maximum age of 60 years at maturity.

2. Loan can be applied for a maximum of 90% of the property value

subject to credit discretion.

3. Other parameters considered include an account of your age, income,

number of dependents, financial stability and co-applicants income

Eligibility

Following are eligible to apply for an IDBI Home Loan:

Salaried individuals

Self employed professionals/businessmen

NRIs

One can include spouse/parents/children as co-applicant if he requires higher

eligibility subject to maximum of three applicants.

LOAN AGAINST PROPERTY

IDBI realise how important it is to raise money in the face of exigencies. The

bank through these difficult situations through the customer friendly Loans

against property (Residential & Commercial) product. Loans could be used for:

Education


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Marriage

Business

Purchase or improvement of property

Medical treatment or any other personal need

Maximum amount possible is Rs 500, 00,000 subject to repayment capacity and

value of property.

ADVANTAGES

Tenor up to 15 years

Attractive Rate of Interest

Maximum Funding

Fixed and floating interest rate options

Simple documentations

EDUCATION LOANS

Education loans from IDBI Bank aim at providing financial support to

deserving/ meritorious students for pursuing higher education in India and

abroad. With an array of courses to choose from and easy repayment options,

IDBI Bank makes sure one get complete financial backing.

COURSES OFFERED

a. Studies in India:

Graduation courses : BA, B.Com., B.Sc., etc

Post Graduation courses : Masters & Phd

Professional courses : Engineering, Medical, Agriculture,

Veterinary, Law, Dental, Management, Computer etc

Computer certificate courses of reputed institutes accredited to

Dept. of Electronics or institutes affiliated to university


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Courses offered in India by reputed foreign universities

Evening courses of approved institutes

Other courses leading to diploma/ degree etc. conducted by

colleges/ universities approved by UGC/ Govt./ AICTE/ AIBMS/

ICMR etc

b. Studies abroad:

Graduation: For job oriented professional/ technical courses

offered by reputed universities. Post graduation: MCA, MBA, MS,

etc. Courses conducted by CIMA- London, CPA in USA etc.

Repayment Terms

The repayment of loan to begin after the course period + 1 year or 6 months

after getting a job, whichever is earlier. The loan to be repaid within 5-7 years

(maximum tenor 84 months) after commencement of repayment.

RATE OF INTEREST

Up to Rs. 4 lakhs 11.75 %

Above Rs. 4 lakhs 12.75

EXPENSE COVERED

Fee payable to college/ school/ hostel

Examination/ Library/ Laboratory fee

Purchase of books/ equipments/ instruments/ uniforms

Travel expenses/ passage money for studies abroad

Purchase of computers - essential for completion of the course

Any other expense required to complete the course - like study tours,

project work, thesis, etc.


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PERSONAL LOANS

Personal Loans from IDBI comes with an insurance cover. This means when

times are tough, one have an insurance cover to take care of the EMI's.

In case of death or disability due to an accident, the principle

outstandings will be paid by the insurance company.

In case of loss of job, the insurance company will pay the EMIs for up to

3 months

Also one can transfer your existing loan to IDBI and save up to Rs 50,000

ELIGIBILITY

Following are eligible to apply for an IDBI Personal Loan:

Salaried individuals

Doctors / dentist

Professionals

Proprietors and partners

REPAYMENT

The terms vary as for salaried people its 12-60 months and for proprietors or

professionals its 12-36 months.

Other Functions.

Tax Payment Service

Bill of Exchange

Bill of Lading

Brokers Note

Debenture

Foreign Bills

Hundi

Insurance

Promissory Note

Proxy


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Revenue Stamp

Share Transfer Form

Role of IDBI in Foreign Investment-

It manages various financial institutions working under IDBI bank

Provides financial assistance to various industrial units in terms of developments

It also offers refinancing options including term loans to the suitable financial

institutions

It provides funding to the industrial units that are involved in manufacture or

processing of goods, mining, transport generation and distribution of power both in

private and public sectors

It also provides finance to various projects, expansion of any project, diversifications,

or even developing the projects which will exceed ` 30 million and it also provides

funding to those projects which cost less than ` 30 million through indirect means as it

offers refinancing to the main financial institutions such as SFC/SIDC/Commercial

Banks etc

Significant developments during FY 2011-12 (April Till date)

International certification ISO 9001:2008 was awarded to IDBI Bank for all its

Centralised Clearing Units across the country. The Bank has also implemented Lean

Six Sigma Project for its Centralised Operations, to provide error-free and timely

services to its customers.

IDBI Bank launched a 247 Premier Locker Facility at its Cuffe Parade, ColabaBranch at Mumbai. IDBI Bank is the First Bank to have a 247 locker facility with a

feature of biometric access. The Bank would also offer such service in metros and

other centers in due course of time.

US Dollar correspondent Wells Fargo Bank N.A. has rated IDBI Bank as the Best

Bank in STP (Straight-through processing) payments in the South Asia region. IDBI

Bank originated more than 1 lakh payment messages in FY 11. The Bank handled

payment messages worth more than USD 15bn in FY 2010-11. The Bank has recentlylaunched multi-currency payment product.


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The Dalal Street Investment Journal (DSIJ) PSU Award was received by IDBI Bank.

The Bank was adjudged the Best Bank of the Year for its consistent performance.

This award is given for the recognition of excellence in performance and contribution

to the Indian economy by the Public Sector Undertakings.

A Memorandum of Understanding (MoU) was signed between IDBI Bank Limited

and the Indian Army for offering a wide range of banking services & products and a

customized defence salary account, exclusively designed for the army personnel.

Under this MoU, IDBI Bank will install ATMs and also open branches at select

locations approved by the Indian Army for benefit of its personnel. IDBI Bank has

designated dedicated officers to service the banking needs of defence personnel at

such branches.

Biblography

Money Banking International Trade and Public Finance

-NE.Thi. Somashekar(Anmol Publication Private Ltd)

UGC NET - Dr.L. N. KOLI

Through Internet -www.Idbi.in

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