Industrial Finance of India: Overview & Major Sources.
Indian industries need three types of finances long teim, medium term and short term finances.
Long term finances are required to purchase permanent assets like land, building, machinery etc.
Industrial units also need long term finances for their extension and re-establishment. Medium term finance is generally a part of long term finance.
Besides, industrial unit has to arrange raw material, intermediate goods and to meet out daily expenses short term finance is required for all these purposes.
Industrial finance in India includes the major sources like shares and debentures, deposits from public, credit from banks and industrial finance institutions. The major industrial finance institutions are :
- Industrial Development Bank of India (IDBI)
- Industrial Finance Corporation of India
- Small Industrial Development Bank of India (SIDBI)
- EXIM Bank
- GIC and its associate companies.
All the above mentioned financial institutions arrange medium and long term finances for industrial units.
Also read | Scope of Financial Management.
Scheduled commercial banks play the important role in providing short term finance to industrial units. Deposits from public and indigenous bankers are also the important sources of short term finance.