Full Form of IDBI – Industrial Development Bank of India
The full form of IDBI is the Industrial Development Bank of India. It is a Development Financial Institution constituted in 1964, as a wholly-owned subsidiary of Reserve bank of India, for providing financial aid to industries and assisting the development institutions (like NSE, NSDSL, SIDBI etc.) in India post-Independence.
It is constituted as a Development Financial Institution in the year 1964 by a parliamentary Act. In 1976, the Reserve Bank of India transferred the ownership of IDBI to Government of India and it became the prominent financial institution for promoting industrial development in India. It also played a key role for the development of national importance institutions like National Stock Exchange, National Securities Depository Services Limited, Stock Holding Corporation of India, Small Industrial Development Bank of India, Exim Bank and Entrepreneurship development institute of India.
Following are the main functions of IDBI Bank –
- Providing financial support for the industries: The long term financial assistance say for 25 years.
- Undertake market study and research for finding the investment opportunity relate to industrial development.
- Promoting institutions working for industrial development.
- Providing technical and administrative assistance for the promotion and expansion of industries.
- Coordinating and supervising the activities of the institutions working in the financing sector.
- Facilitate balanced industrial development across India.
In 2003, IDBI converted to a commercial bank under the act Industrial Development Bank (Transfer of undertaking and Repeal) Act, 2003. The bank gained its new status as a part of reforms in the financial sector. Later on, in 2004, it was incorporated as a scheduled bank. The bank renamed as IDBI Ltd.
In January 2019, the Reserve Bank of India, reclassified IDBI bank as a private sector bank for regulatory purposes, after the 51% acquisition of stake by Life Insurance Corporation of India. Now the government holding is 46.46% stake in the bank.
The headquarters of the bank is located in Mumbai with 5 regional offices. Apart from that, the bank is having branches in different locations. The organization and management consist of Chairman and Managing Director appointed by the government of India and 20 other directors nominated by the govt. The board has formed an executive committee consisting of 10 members, including chairman and Managing director, responsible for approval of financial assistance.
Following are the subsidiaries of IDBI Bank –
- IDBI Capital Market Services Ltd(ICMS)
- IDBI Asset Management Ltd (IAML)
- IDBI MF Trustee Company Ltd(IMTCL)
- IDBI Federal Life Insurance Company Ltd(IDBI Federal)
- IDBI Intech Ltd.(IIL)
ICMS, IAML, IMTCL and IIL are the wholly-owned subsidiaries of IDBI Bank. Whereas IDBI federal is a joint venture of IDBI Bank, Federal Bank and Ageas insurance international. IDBI has 48% stake and other companies have 26% each.
Products and Services of IDBI
Like every other bank, IDBI also provides various products and services to its customers. The most important factor is the bank is providing products and services to the Agriculture sector also. The products and services provided under Personal, Corporate, MSME, Agri and NRI Banking.
#1 – Personal Banking
Under this category the bank provides normal banking products like preferred banking, loans, fixed deposit and lockers, cards, 24-hour banking, Flexi current account etc. apart from that the bank provides
- Kutumb-Family banking
- Pradhan Mantri Social Security Scheme
- Trusteeship through ITCL
- Sukanya Samriddhi Account
#2 – Corporate Banking
The main product in this banking is the financial assistance to the corporate. The assistance is based on the requirement like long term, short term, working capital, channel financing, Bill discounting etc.
- Non-fund based assistance like bank guarantee, letters of credit and buyer’s credit.
- Cash management services
- Treasury both domestic and forex
- Trade Finance
- Govt Business
- Corporate Schedule of Facilities
#3 – MSME Banking
This category mainly focuses on the development of Micro Small Medium Enterprises.
- Financial assistance to MSMEs: It includes a full range of banking solutions to MSME entrepreneurs.
- Loan against Property: Providing loan against self-owned commercial and residential properties
- IDBI Dhanvantari Loan: Loan facility offered to doctors for running a clinic or hospital.
- Loan to small road water transport operators: They play a key role in the socio-economic development of the society. This is the financial assistance for buying vehicles or vessels for running their business.
- Sulabh Vyapar Solutions: This is for small traders, retailers, and wholesalers.
- Vendor Finance Program.
- Laghu Udhyami Credit Cards: This is for the existing customers belonging to micro and small individual unit
- IDBI loan for Service Sector: The assistance for those involved in the manufacturing and supply of goods and services to corporates.
- IDBI Mudra Loan: This facility is focused on those who involved in nonfarm business activities under Pradhanmantri Mudra Yojana
#4 – Agriculture Banking
This is the most important and distinct service by IDBI –
- Short term Agricultural finance: Crop Loans, Gold finance and warehouse receipt finance scheme
- Long term finance like farm mechanization, dug wells, minor irrigation, land purchase for agriculture purpose, land development, Horticulture and forestry development loans, purchase of bullock and carts, biogas plants
- Loans for allied activities like poultry farming, dairy farming, fisheries, sericulture, sheep and goat rearing, Beekeeping.
- Indirect financings like loans to construction and running of storage facilities and development of Agri clinics and agribusiness centres
#5 – NRI Banking
This is the service providing to NRIs like NRI account, NRE account, Remittance services and FCNR deposits.
IDBI bank provides innovative services as well to its customers like –
Real-time monitoring System: enable the customers to scan the transactions to identify fraud transactions.
Abhay Card Limit Control App: It an app allows the customers to control their debit and credit cards
Mini Enterprise Service Bus: It helps to reduce the solution development time
Facebook and Twitter Banking: It helps to carry out the transactions through social media platforms in a safe and secure way.
IDBI is now a universal bank operated by cutting edge core banking platform and it is one of the largest commercial banks in India; with more than 50 years of glorious expertise in the financing industry. The journey started as DFI and now it continues as a private sector bank by holding its vision “To be the most preferred and trusted bank enhancing value for all stakeholders.”
This has been a guide to Full Form of IDBI and its definition. Here we learn the functions and subsidiaries of IDBI along with its products and services. You may refer to the following articles to learn more about finance –