Which is the first established body in the field of Industrial Finance in India?

Question

Accepted Answer

The correct option is 1:

The Industrial Finance Corporation of India (IFCI) is recognized as the first Development Financial Institution (DFI) established in India specifically for industrial development. It was established by the Government of India on July 1, 1948, under the Industrial Finance Corporation Act, 1948, shortly after India gained independence. Its creation marked the beginning of specialized institutional finance in the country, aimed at providing medium and long-term credit to industrial units, which was crucial for implementing India's early five-year plans focused on industrial growth.

The incorrect option is 2:
The Industrial Development Bank of India (IDBI) was established much later in 1964 as a subsidiary of the Reserve Bank of India, primarily as an apex institution to coordinate the functioning of other financial institutions and provide large-scale industrial finance. While it plays a major role in industrial finance, its establishment date is significantly later than IFCI.

The incorrect option is 3:
ICICI (Industrial Credit and Investment Corporation of India) was established in 1955. Although it was also a pioneering institution in industrial finance, providing foreign currency loans and assisting in private sector growth, IFCI predates ICICI by seven years.

The incorrect option is 4:
SIDBI (Small Industries Development Bank of India) was established much later, in 1990. SIDBI is specifically mandated as the principal financial institution for the promotion, financing, and development of the Micro, Small, and Medium Enterprise (MSME) sector, focusing on smaller units rather than general industrial finance from the very beginning of planned development.