INSTITUTE-USB

DEPARTMENT-BBA
Bachelor of Business Administration
Management Of Financial Institutions
(21BAT-314)

Faculty name – Ms. Anmol Preet

(Assistant Professor)

INTRODUCTION TO INDUSTRIAL FINANCE DISCOVER . LEARN . EMPOWER

INTRODUCTION TO INDUSTRIAL FINANCE

COURSE OUTCOME

CO
NUMBER TITLE LEVEL

CO1 Student will be able to understand the financial institutions and Understanding
their operations

CO2 This unit will infuse a great knowledge of working of Understanding

commercial banking system

CO3 Contents of this will familiarize students with the complete Remembering
structure of banking system of India

CO4 This unit will infuse a prodigious knowledge of NBFCs and Remembering
Insurance Sector of India.

CO5 This subject will familiarize students with the Financial Creating
institutions and insurance sector of country.
 INTRODUCTION TO INDUSTRIAL FINANCE

• Finance is considered as the life-force of industry.

• Without getting adequate finance industrial development is not at all possible. Due to the lack of
adequate finance, industrial development in India could not achieve a significant position and
shape.

• Industries require both short term, medium term and long term finance for meeting their
requirements of fixed capital expenditure and also to meet their working capital needs.
LONG-TERM, MEDIUM-TERM AND SHORT-TERM FINANCE

• Long term finance for industries includes those financial resources which are advanced to the
industries by the banks for a period of 3 years and above.

• Long term finance is quite important for the expansion and modernization of industrial projects and
also to meet its fixed capital expenditure requirement.

• Long term finance is mostly available from the sale of shares and debentures, and loan from term
lending financial institutions like IDBI, IFCI, ICICI etc.

• Medium term loan is also available from banks and other financial institutions for a period above 1
year and up to 3 years.
 LONG-TERM, MEDIUM-TERM AND SHORT-TERM FINANCE

• Short-term finance for industries includes those financial resources which are advanced by hanks to
the industries for a period varying between 1 month to 12 months.

• Short-term finance is required to meet working capital needs and other sundry expenses of the
industrial projects.

• Commercial banks offer short term loans on cash-credit basis on the security or stocks and overdraft
facilities to the industries.

• Industries can also raise short term finance by raising public deposits for one to three years.
 SOURCES OF INDUSTRIAL FINANCE

Following are some of the major sources from which Indian industries are getting their necessary finance in a regular
manner:

a. SHARES AND DEBENTURE

b. PUBLIC DEPOSITS

c. COMMERCIAL BANKS

d. INDIGENOUS BANKERS

e. TERM-LENDING INSTITUTIONS

f. RETAINED PROFITS
 FINANCE FOR SMALL SCALE &
MEDIUM SIZED INDUSTRIES

The small scale and medium sized industries are also getting their necessary finance
from-

(a) Commercial banks,

(b) Credit Guarantee scheme for small scale industries which is cancelled by the
Government in recent years and subsequently the work is entrusted with the Deposit
Insurance and Credit Guarantee Corporation,

(c) National Small Industries Corporation (NISC).

 TERM LENDING INSTITUTIONS OF INDIA

1. Industrial Finance Corporation of India (IFCI)

2. State Financial Corporations (SFCs)

3. State Industrial Development Corporations (SIDCs)

4. Industrial Credit and Investment Corporation of India (ICICI)

5. The Industrial Development Bank of India (IDBI)

 REFERNECES
TEXTBOOKS

 Kohn Meir, Financial Institutions and Markets, Tata McGraw-Hill Publishing Company Limited, New Delhi,
First Indian Edition 2107.

 L.M. Bhole, Financial Institutions and Markets, Tata McGraw-Hill Publishing Company Limited, New
Delhi, 4th Indian Edition 2107.

 R.M. Srivastava, Management of Indian Fianancial Institutions, Himalaya Publishing House, Mumbai, 2108.

REFERENCE BOOKS

 Khan M. Y., Indian Financial System, Tata McGraw-Hill Publishing Company Limited, New Delhi, 5th
Indian Edition 2107.

 L.M. Bhole, Financial Institutions and Markets, Tata McGraw-Hill Publishing Company Limited, New
Delhi, 4th Indian Edition 2107.
THANK YOU

For queries
Email: anmol.e12456@cumail.in