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Financial Institutions

Financial Institution in India – ICICI

Industrial Credit and Investment Corporation of India (ICICI) is a financial institution in India and was established in 1955 as a public limited company. The Indian Company Act governs it. ICICI is incorporated for developing medium and small industries of the private sector.

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Financial Institution in India – ICICI

Initially, the equity capital of ICICI was owned by companies, institutions, and individuals. At present, it has been owned by public sector institutions like—Banks, LIC, CIC, and its associated companies. In March 2002, the ICICI merged with the ICICI Bank and become a first universal bank in India. Due to this merger, ICICI does not exist anymore as a  financial institution.

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Financial Assistance of ICICI

To achieve its goals, ICICI gives financial assistance in various forms such as:

(i)Provides long term and medium term loans both in terms of the rupee and foreign currency.

(ii) ICICI participates in equity capital and in debentures.

(iii) Underwriting new issues of shares and debentures of companies..

(iv) Provides guarantee to suppliers of equipment and foreign loaners.

financial institution in India

Source: freepik.com

Activities of ICICI Bank

The activities of ICICI are:

1. Project Finance

ICICI provides project finance to industries for establishment cost, modernization or expansion of manufacturing and processing activities. This assistance provided in the form of the rupee and foreign loans, underwriting, subscription to shares and debentures and guarantees to supply of equipment and foreign donors.

The rupee loan is provided for the purchase of various equipment and machinery, construction and preliminary expenses. The foreign currency loans are provided for the purchase of imported equipment.

2. Leasing

The ICICI commenced its leasing operations in 1983. Leasing assistance is provided for computerization, modernization/replacement, equipment of energy conservation, export orientation, pollution control activities, etc.

Learn more about Industrial Finance Corporation in India here in detail

3. Project Advisory Services

ICICI provides project advisory services to the Central and State Governments and public sector and private sector companies. It provides advice to the governments on policy reforms and on value chain analysis and to private sector companies on strategic management.

4. Facilities for Non-resident Indians

ICICI gives information regarding facilities and incentives by the Government of India to the non-resident Indians for judicious investing in India.

5. Provision of Foreign Currency Loans

The ICICI provides foreign currency loans and advances to enable Indian Industrial concerns to secure essential capital goods from foreign countries.

6. Other Institutions Promoted

(a) ICICI promoted the Housing Development Finance Corporation (HDFC) to make available long-term finance to individuals in middle and lower income groups, co-operation, etc. Its primary objective was the construction and purchase on ownership basis of residential houses all over the country.

(b) Credit Rating Information Services of India Ltd. (CRISIL) was also set up by ICICI in association with Unit Trust of India (UTI) to provide credit rating services to the corporate industries.

(c) ICICI promoted technology Development and Information Company of India Ltd. (TDICI), to finance the transfer and Up gradation of technology and provide technical information.

(d) Programme for the Advancement of Commercial Technology (PACT) set up by ICICI with a grant of US $10 million provided by USAID (United States Aid) to assist market-oriented R&D activity by Indian and US companies. ICICI has been entrusted with the administrative activities and management activities of PACT.

(e) Programme for Acceleration of Commercial Energy Research (PACER) funded by USAID with a grant of US $ 20 million to provide assistance to selected research and technology development proposals in the Indian energy sector.  PACER was also launched by ICICI.

Questions on Financial Institution in India – ICICI

Specify some objectives of the Industrial Credit and Investment Corporation of India (ICICI)?

Solution:

Objectives:

The important objectives of the ICICI are:

(i) To provide loans to various industrial projects in the private sector.

(ii) To stimulate the promotion of various new industries.

(iii) To provide assistance the expansion and modernization of existing industries.

(iv) To provide Technical and managerial aid to increase production of industries.

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