Development Financial Institutions (DFIs)
- DFIs in India refer to specialized financial institutions that are primarily focused on providing long-term financial support and development finance to specific sectors or sub-sectors of the economy.
- These institutions aim to bridge the gap in long-term financing, particularly in areas where traditional commercial banks might be hesitant to provide extended credit due to higher associated risks.
- DFIs in India historically played a critical role in providing financial support to key sectors such as infrastructure, agriculture, small-scale industries, and other priority areas identified for national development.
- They have been instrumental in channeling funds into projects that have the potential to drive economic growth and social development, thereby contributing significantly to the country's overall progress.
Industrial Development Bank of India (IDBI)
- An example of a Development Financial Institution (DFI) in India is the Industrial Development Bank of India (IDBI).
- Established in 1964 under an Act of Parliament, IDBI was initially set up as a wholly-owned subsidiary of the Reserve Bank of India.
- Its primary objective was to provide financial assistance and developmental support to key sectors of the Indian economy, particularly in the realm of industry and infrastructure.
