Submitted towards the partial fulfillment of

1st semester of MBA-FINANCE

Degree course, for the subject

Managerial economics

PROJECT REPORT
ON

Role of financial institutions in recent economic crisis

Submitted by: Submitted to:

Mahendra singh garva Dr. Kranti kapoor
MBA-FINANCE (1st Semester) Assistant Professor
NLU, Jodhpur Faculty of policy
science
Roll no.- 245 NLU,Jodhpur.
 ACKNOWLEGEMENT

An Endeavour such as this would have not been completed without the support and help of
many talented and caring people. I have been fortunate enough to be assisted by them. And I
wish to express my appreciation to all those, whose help has been most valuable.

I express my sincere thanks to Dr. Kranti Kapoor for valuable guidance and moral support.
Apart from my esteemed faculty member Dr. Kranti Kapoor, I extend my sincere thanks to my
classmates and seniors of MBA-LLM/ M.B.L/INSURANCE for providing me valuable
suggestion, support and guidance during the progress of this project work. However I would
solely regard myself responsible for any loophole or limitation in the underlying project report.

Lastly, my deep gratitude to my parents for their abundant support and encouragement to me.

AUGUST, 2009 Mahendra singh garva

MBA-Finance
I Semester
Roll no.-245

INDEX
S.no. Particulars Page no.
1. INTRODUCTION 1

2. CAUSES OF FINANCIAL CRISIS 4

3. IMPACT OF FINANCIAL CRISIS ON 5

INDIAN ECONOMY
4. FINANCIAL INSTITUTIONS OF INDIA 8

5. ROLE OF MAJOR FINANCIAL INSTITUTIONS 10

IN INDIAN ECONOMY

• RBI
• CENTRAL BOARD OF DIRECT
TAXES (CBDT)
• UNIT TRUST OF INDIA (UTI)
• SECURITY AND EXCHANGE
BOARD OF INDIA (SEBI)
• CENTRAL BOARD OF EXISE AND
CUSTOM
• LIFE INSURANCE CORPORATION
OF India (LIC)
• INDUSTERIAL DEVELOPMENT
BANK OF INDIA (IDBI)
6. CONCLUSION 17

7. BIBLIOGRAPHY 18

Area of study: Managerial Economics

Title of the Study: Role of financial institutions in recent economic crisis

CHAPTER 1 - INTRODUCTION: -
Financial crisis is a situation in which the supply of money is outpaced by the demand for
money. This means that liquidity is quickly evaporated because available money is withdrawn
from banks (called a run), forcing banks either to sell other investments to make up for the
shortfall or to collapse.
The Global Economic crisis had begun from US and Europe by the autumn of 2007, Mainly it
started with the “sub loans” which home loans are made for people who are less likely to pay
back - So essentially high-risk home loans. In India it was mainly perceived to be rich world
problem right up till august 2008. The impact of it in Indian stock prices in January 2008. The
rate of inflation jumped from about 5% in February 2008 to 10% by April 2008, and despite this
the government keeping the issue prices of food grains, fertilizers, petrol, diesel, kerosene, and
LPG largely unchanged during the period. In India by the end of the year 2008-09, the global
crisis had taken a substantial toll of India’s economic performance but it was by no means
catastrophic, but the rate of economic growth had slowed to the 5-6% range in the second half of
the year from 9% average of the previous five years. In mid 2008 as the oil price was racing
towards a peak of $147 a barrel and other commodity prices were also peaking, and as the
financial crisis triggered by sub-prime mortgages in the United States was gathering momentum,
many in India were more concerned by the rising domestic inflation, particularly the rise in food
prices than by financial crisis.
The Indian economy, which was widely believed to be less integrated with the global economy,
felt the aftermath of the financial crisis emanating from the US rather quickly. First the crisis
appeared as a crash in the stock market following the steady withdrawal of funds by the Foreign
Institutional Investors. This in turn led to a credit crunch giving rise to soaring interest rates
especially in the money market. As External Commercial Borrowings (ECBs) got dried up,
many Indian corporate firms turned to the domestic market for their credit needs thus
compounding the problem. Sectors which were exposed to the global market to a high degree
such as civil aviation, textiles, leather, gems and jewellery and so on were suddenly faced with a
decline in demand that led to job loss and/or adjustments in wages and salaries. Suddenly it was
realized that the economy was not going to realize its expected growth rate of 9 percent. Official
circles talked about a 7 percent growth rate while independent estimates came out with
predictions that were less than this rate. It is in this background that the Government of India
came out with two stimulus packages.
These stimulus packages were intended to rebuild confidence in the economy basically to
a) support most affected sectors, b) improve access to credit and liquidity for enterprises and
c) To boost local demand for selected goods and services. A Stimulus Package for US $ 4
billion was announced on 6 December 2008 and was followed later by a second package on 2
January to prevent a further slowdown of the economy. The overall stimulus package adds up to
around US$8 billion that is less than one percent of the GDP. There is some concern that these
measures would lead to an increase in the fiscal deficit significantly (approx. 3-5%) which is a
concern to many stakeholders, given the already growing fiscal deficit of India. Even though
measures like further tax cuts is unlikely to be announced, Government is aware that announced
measures (providing an economic stimulus to economy) need to be extended beyond the current
financial year. Hence, Government is finalizing Plan and Non-plan expenditure that will be
required for the next financial year to maintain the same momentum. Amongst other proposals,
the plan will include recapitalization of public sector banks with an app. amount of another
20’000 Crore for the next 2 years. This should keep the potential for liquidity constraints in
banks minimal.

The Prime Minister of India had a review meeting with captains of Industry on the impact of the
ongoing global financial crisis and constituted an apex group under his chairmanship to monitor
and coordinate the government’s response to the crisis. The other members of this high powered
committee are the Ministers of Commerce and Industry, Finance, Deputy Chairman, Planning
Commission and the Governor of the Reserve Bank of India, India’s central bank (The Hindu, 5
November 2008). The Prime Minister also approved a Committee of Officers under the
chairmanship of the Finance Secretary to consider the issues raised by the Industry on daily
basis.

There are number of factors present in financial institutions due to which financial crises
increases, some of the factors are as follows-
• Imprudent Mortgage Lending
• Lack of Transparency and Accountability in Mortgage Finance
• Financial Innovation
• Excessive Leverage
 • Relaxed Regulation of Leverage

The International Finance Corporation (IFC) is planning to expand support to the private sector
through the following initiatives, to be implemented over a 3-year period:

(i) a doubling of the Global Trade Finance Program to $3.0 billion and the issuance of
up to $18 billion in guarantees for short-term trade finance, benefiting participating
banks based in 66 countries
(ii) the launch of a global equity fund to recapitalize distressed banks, with $1 billion
provided by the IFC and $2 billion by Japan
(iii) the creation of an infrastructure crisis facility, to provide rollover financing to help
recapitalize existing, viable, privately-funded infrastructure projects facing financial
distress, with $300 million provided by IFC and $1.5 billion from other sources
(iv) a refocusing of advisory services programs on banking for small and medium-sized
enterprises, leasing, microfinance, housing, investment policy and promotion, and
business operation and regulation for an estimated financing of $40 million.

CHAPTER 2- CAUSES OF FINANCIAL CRISISES:-

There are several underlying causes of the current global crisis. a summary of major causes of
the crisis are as follows-
• First, the United States and some other European countries enjoyed prolonged in house
prices since the early 1990s right up to end of 2006. People began to believe that houses
prices only go up; they would never fall. This led to massive amount of lending by banks
for home purchases, often to borrowers who did not have jobs or steady incomes. In can
say that, many of these borrowers were “sub-prime” or, not credit worthy.
 • This housing bubble was part of a massive borrowing binge in the United States and
some European countries by households and financial institutions that was fuelled by
the “easy money” policies of the central banks and huge inflows of funds from capital
surplus countries such as china, japan, germany, and oil exporters. These big exporting
nations sold their products to american and European consumers and the parked their
surpluses (over and above their imports) in American and European government
securities. As an indicator of this huge borrowing binge, the ratio of gross debt to GDP
of US household, business and government more than doubled from about 160% in 1982
to 340% in 2007. Most of this massive increase in borrowing was accounted for by
households and financial firms (like banks).
• Thirdly, this huge increase in borrowing was encouraged by rapid financial innovation
which supposedly reduced and transferred the risk (of default) by borrowers, such as
sub-prime home loan borrowers. In fact, of course, these financial innovations actually
spread the risks of the underlying weak credits throughout the western financial system.
• An Important reason why this massive expansion of complex financial products, built on
a foundation of shaky housing loans, could go on for many years in because of a
growing culture of weak regulation of financial institutions and markets that prevailed
in the US, UK, and some other countries for the past two decades.
Earlier year 2009 is likely to be very worst year since the Second World War.
Output in the advanced industrial economics is expected to drop by 4% and world trade
by over 10%. So, the economic growth in industrial countries in the first couple of years
beyond 2010 is more likely to be at the modest rate of 1-2% than the 3-4% that we have
witnessed in the years 2002-2007.
CHAPTER 3- IMPACT OF FINACIAL CRISIS ON INDIAN
ECONOMY:-

The global financial crisis had begun from US and Europe by the autumn of 2007, in India it
was mainly perceived to be rich world problem right up till august 2008. The impact of it in
Indian stock prices in January 2008. The rate of inflation jumped from about 5% in feburay 2008
to 10% by April 2008, and despite this the government keeping the issue prices of food grains,
fertilizers, petrol, diesel, kerosene, and LPG largely unchanged during the period.
In India by the end of the year 2008-09, the global crisis had taken a substantial toll of India’s
economic performance but it was by no means catastrophic, but the rate of economic growth had
slowed to the 5-6% range in the second half of the year from 9% average of the previous five
years. In mid 2008 as the oil price was racing towards a peak of $147 a barrel and other
commodity prices were also peaking, and as the financial crisis triggered by sub-prime
mortgages in the United States was gathering momentum, many in India were more concerned
by the rising domestic inflation, particularly the rise in food prices than by financial crisis

This economic growth was still much better than the negative growth rates in industrial
countries and betters then the performance of most significant developing countries.
Furthermore, with global commodity prices falling sharply the rate of inflation was also
dropping quickly in India although food prices were still uncomfortably high. However, with the
sudden shrinkage in world trade after September 2008, India’s exports in January -march, 2009
were about 20% lower than in the previous year. This meant that thousands of jobs were lost in
sector like garments, textiles, footwear and leather products and gems and jewellery.
The Indian economy grew by 6.7 per cent in 2008-09 according to the revised estimates of the
Central Statistical Organization (CSO) – better than most analysts had expected, but lower than
the growth of 9.0 per cent in 2007-08. The deceleration in GDP growth was particularly
pronounced during the second half of 2008-09, largely due to the adverse impact of the global
economic crisis.

The following table shows GDP of various sector in India:-

Agriculture
The agriculture sector, which recorded an average annual growth rate of 4.9 per cent
during 2003-08, expanded only by 1.6 per cent during 2008-09. In 2008-09, food grains
production was 233.9 million tonnes, up from 230.8 million tones last year. This was also an all-
time high. Allied activities – horticulture, floriculture, forestry, livestock and fisheries – which
account for a substantial share in agriculture remained buoyant. However, the production of
commercial crops such as major oilseeds, cotton, jute and sugarcane was lower. Looking ahead
to the current year, the progress of the south-west monsoon has been slow and halting. By July
22, 2009, monsoon rainfall was 19 per cent below normal in the country as a whole. At a
disaggregated level, rainfall was deficient/scanty in 19 of the 36 meteorological sub-divisions.
While kharif sowing has picked up in July, the delayed monsoon can impact agricultural output.
Although the share of agriculture and allied activities in GDP has declined over the years and is
currently at 17.5 per cent, good agricultural performance is critical not only because it employs
over 55 per cent of the labour force but also for ensuring stability in food prices.

Industry
Industrial sector growth decelerated significantly to 2.6 per cent in 2008-09 from 8.5 per
cent in the previous year due largely to negligible/negative growth during four months in the
second half of the year. This pushed down the growth rate of the index of industrial production
(IIP) to an abysmally low of 0.4 per cent during the second half of 2008-09 from 5.0 per cent in
the first half. During April-May 2009, however, industrial growth turned positive with IIP
increasing by 1.9 per cent. While growth in the basic, intermediate and consumer durable goods
sectors picked up, the capital goods and consumer non-durable sectors showed negative growth.
The core infrastructure sector, with a weight of 26.7 per cent in the IIP, recorded a higher
growth of 4.8 per cent during April-June 2009, up from 3.5 per cent in the corresponding period
in the previous year. The leading indicators of industrial production, both quantitative and
qualitative, suggest that the recent downturn has been arrested and a pick-up is on the way
forward.
Services
The performance of the services sector during April-May 2009 presents a mixed but
predictable picture. Trade-related services such as cargo handled at major sea and airports, as
also passengers handled at international terminals continue to show deceleration/negative
growth. Domestic activity-related services such as communication and construction are showing
signs of upturn. Economic development in India depends on the various sectors that constitute
the Indian economy – these are primarily the agriculture, services and manufacturing industries.

India is rated as one of the top economies in the world in terms of the purchasing power parity of
the gross domestic product by leading financial entities of the world such as the International
Monetary Fund, the World Bank, and the CIA (as referenced in the CIA World Fact book).
As far as agriculture is concerned, India is in the second largest in volume of output. Certain
connected sectors of the agricultural sector have played a major role in the development of the
Indian economy by providing employment to a number of people in the forestry, fishing and
logging industries. During 2005, the agricultural sector contributed 18.6% to the entire GDP,
and at least 60% of the total labor force working in India was employed in the agricultural
sector.

CHAPTER4- Financial institutions OF India

The Financial institutions in India are divided in two categories. The first type refers to
the regulatory institutions and the second type refers to the intermediaries.
i) The regulators are assigned with the job of governing all the divisions of the
Indian financial system. These regulatory institutions are responsible for maintaining the
transparency and the national interest in the operations of the institutions under their
supervision. The regulatory bodies of the financial institutions in India are as follows:
• Reserve Bank of India (RBI)
• Securities and Exchange Board of India (SEBI)
• Central Board of Direct Taxes (CBDT)
• Central Board of Excise & Customs
 ii.) On the other hand, there are the intermediaries that include the banking and non-
banking financial institutions. The banking institutions of India play a major role in the economy
of the country. The banking institutions are the providers of depository and transaction services.
These activities are the major sources of creating money. The banking institutions are the major
sources of providing loans and other credit facilities to the clients.
Apart from the banking financial institutions, there are a number of specialized financial
institutions in India that have been incorporated for a definite purpose. These institutions include
the insurance companies, the housing finance companies, mutual funds, merchant banks, credit
reporting and debt collection companies and many more. Some of the specialized financial
institutions in India are as follows:
• Unit Trust of India (UTI)
• Securities Trading Corporation of India Ltd. (STCI)
• Industrial Development Bank of India (IDBI)
• Industrial Reconstruction Bank of India (IRBI), now (Industrial Investment Bank of
India)
• Export - Import Bank of India (Exim Bank)
• Small Industries Development Bank of India (SIDBI)
• National Bank for Agriculture and Rural Development (NABARD)
• Life Insurance Corporation of India (LIC)
• General Insurance Corporation of India (GIC)
• Shipping Credit and Investment Company of India Ltd. (SCICI)
• Housing and Urban Development Corporation Ltd. (HUDCO)
• National Housing Bank (NHB)

Apart from these, there are several other financial institutions that are existing in the country.
These are the stock brokers and sub-brokers, portfolio managers, investment advisors,
underwriters, foreign institutional investors and many more.
 CHAPTER 5 - Role of major financial institutions in Indian
economy

A. RESERVE BANK OF INDIA (RBI):-

The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions
of the reserve bank of India act; 1934.The Central Office of the Reserve Bank was initially
established in Calcutta but was permanently moved to Mumbai in 1937. The Central Office is
where the Governor sits and where policies are formulated. Though originally privately owned,
since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India

Going forward, the Reserve Bank’s policy stance will continue to be to maintain comfortable
rupee and forex liquidity positions. The Reserve Bank of India Act, 1934 was commenced on
April 1, 1935. The Act, 1934 (II of 1934) provides the statutory basis of the functioning of the
Bank.The Bank was constituted for the need of following:

• To regulate the issue of banknotes

• To maintain reserves with a view to securing monetary stability and

 • To operate the credit and currency system of the country to its advantage

The Annual Policy Statement of RBI, 2009-10 announced on April 21, 2009 stated the following
policy stance:-
• Ensure a policy regime that will enable credit expansion at viable rates while preserving
credit quality so as to support the return of the economy to a high growth path.
• Continuously monitor the global and domestic conditions and respond swiftly and
effectively through policy adjustments as warranted so as to minimize the impact of
adverse developments and reinforce the impact of positive developments.
• Maintain a monetary and interest rate regime supportive of price stability and financial
stability taking into account the emerging lessons of the global financial crisis.

The Reserve Bank of India has been actively engaged in policy action to minimize the impact of
the global crisis on India. The policy response of the Reserve Bank has helped in keeping India’s
financial markets functioning in a normal manner and in arresting the growth moderation. The
Reserve Bank will continue to maintain vigil, monitor domestic and global developments, and
take swift and effective action to minimize the impact of the crisis and restore the economy to a
high growth path consistent with price and financial stability.

Existing policies of RBI for minimize the impact of global economic crisis –

Fiscal and monetary policy packages - Stimulus Package I

Amount: First Package US 4. Billion (Rs. 20,000 crore)
(The Indian News: 7 December 2008)

The first fiscal package, a modest one, was intended to keep the domestic demand high as well
as to provide incentives to some selected export sectors. This included enhanced credit for
exports, cut in excise duties, relief to the dooming housing sector and SMEs. According to the
Deputy Chairman of the Planning Commission Mr. Montek Singh Ahluwalia, the package will,
“minimize the impact of weak global economy on the Indian economy” and help achieve a 7%
growth rate. (First Fiscal Stimulus Package : December 26, 2008
Monetary /Fiscal
• A cut in interest rates by India’s central bank: The Reserve Bank of India reduced its
repo rate, the rate at which it lends to commercial banks -to 6.5 percent, and its reverse repo rate
( the rate at which it borrows overnight ) to 5.0 percent.

- Interest subvention of two percent on export credit for labour intensive sectors
- Additional allocations for export incentive schemes
- Full refund of service tax paid by exporters to foreign agents
- Incentives for loans on housing for up to Rs.500,000, and up to Rs.2 million
- Limits under the credit guarantee scheme for small enterprises doubled
- Lock-in period for loans to small firms under credit guarantee scheme reduced
- India Infrastructure Finance Co allowed to raise Rs.100 billion through tax-free bonds
- Norms for government departments to replace vehicles relaxed
- Import duty on naphtha for use by the power sector is being reduced to zero
- Export duty on iron ore fines eliminated
- Export duty on lumps for steel industry reduced to five percent

The RBI also announced that it will extend a line of credit to small scale industries and
Housing finance banks: The government announced a cut in Centrally-imposed Value Added
Tax by 4% to increase spending across-the-board In addition:

• To boost exports, govt. announced extra allocation of 70 million dollars.

• To boost infrastructure spending, the government authorized a recently created India
Infrastructure Finance Co. Ltd to raise Rs.10,000 crores through tax free bonds.
• The government also announced that initiatives are being taken to support Public
Private Partnership programme of Rs.100,000 core to the highway sector.
• To boost housing sector, public sector banks were urged to announce attractive home
loan packages.
• The government decided to seek authorization for additional plan expenditure of up to
Rs. 20,000 crore in the current year mainly for critical rural infrastructure and social
security schemes such as Pradhan Mantri Gram Sadak Yojana, Jawaharlal Nehru
 National Urban Renewal Mission, National Rural Employment Guarantee Scheme,
India Awas Yojana, Accelerated Irrigation Benefit Programme and National Social
Assistance Programme.
In the light of the decline in exports by 12%, the government has decided to subsidize this
Sector with an interest subvention of 2% up to March 2009 to pre and post shipment export
Credit for labour intensive exports like textile, leather, marine products and SME sector .
Concession is subject to a minimum rate of interest.

• Since mid-September 2008, the Reserve Bank has reduced policy rates significantly: the
repo rate by 425 basis points and the reverse repo rate by 275 basis points. The CRR was
also reduced by 400 basis points of NDTL of banks .

Monetary easing by the reserve bank since October 2008 (%)

Taking cues from the reduction in the Reserve Bank’s policy rates and the easy liquidity
conditions, all public sector banks, most private sector and foreign banks have reduced their
deposit and lending rates. The reduction in term deposit rates between October 2008 and July
20, 2009 has been in the range of 125-325 basis points by public sector banks, 100-375 basis
points by private sector banks and 125-300 basis points by five major foreign banks. The
reduction in the range of BPLRs was 125-275 basis points by public sector banks, followed by
100-125 basis points by private banks and 125 basis points by five major foreign banks.

A. CENTRAL BOARD OF DIRECT TAXES (CBDT)

Since 1 January 1964 the Central Board of Direct Taxes (CBDT) has been charged with all
matters relating to various direct taxes in India and it derives its authority from Central Board of
Revenue Act 1963. The CBDT is a part of Department of Revenue in the Ministry of Finance.
On one hand, CBDT provides essential inputs for policy and planning of direct taxes in India , at
same time it is also responsible for administration of direct tax laws through Income Tax
Department
Direct Taxes department are a significant source of revenue as well as an instrument of
achieving socio-economic objectives. it is responsible for formulation and implementation of all
policies relating to tax administration. The Board consists of a Chairman and five Members, and
has several attached and subordinate offices throughout the country.

B. UNIT TRUST OF INDIA (UTI)-

Unit trust of India (UTI) was established in 1964, by an Act of Parliament to encourage and
mobilise savings of small investors through sale of ‘Units’ and to channelise these resources into
corporate investments. Over the years, it has rapidly grown and diversified to be an important
part of Indian Financial System. UTI’s wide range of plans/schemes/ funds cover a broad
spectrum of investment goals and includes open-ended and closed-ended income schemes,
capital accumulation plans, regular income needs and liquidity needs.
The largest share of entire sanctions by UTI was for other purposes comprising mainly working
capital loans (63.6%), followed by expansion/diversification (19%) and new projects (16.6%),
while modernisation / balancing equipment/rehabilitation accounted for the balance (0.8%).
Sanctions for expansion/diversification of projects increased manifold, followed by other
purposes (56.8%), while sanctions to new projects declined by 1.8% during 2008-2009.

C. SECURITY AND EXCHANGE BOARD OF INDIA (SEBI):-

The SEBI has been inspecting all the stock exchanges once every year since 1995-96 under the
SEBI Act, 1992. The Indian Parliament mandated SEBI, “to protect the interest of investors in
the securities and to promote the development of and to regulate the securities market and for
matters connected therewith or incidental thereto”. Over a period of nearly a decade of its
existence, SEBI has established itself as a ‘regulator of consequence’.

D. CENTRAL BOARD OF EXCISE AND CUSTOMS-

The CBEC is the apex body for the collection of duties of Excise, Customs and Services
(Service Tax). This organization is working within the Ministry of Finance and is the
policy making body for the laws, procedures and methods by which the above taxes are
Sp
rea
d
Lif
e
Ins to be collected. The cost of collection of the above taxes is the least in the world. In order
ura
nc to further improve the efficiency of collection of taxes and services rendered by the
e subordinate formations it was decided to formulate a Citizens’ Charter.
wi
del
y
an
d Regulatory functions
in 1. Assessment and examination of imported / exported goods
par
tic 2. Prevention of illegal imports / exports
ula 3. Passenger clearance
r
to 4. Adjudications and appeals
the 5. Refund, drawback and recoveries
rur
al 6. Issue of rules / regulations / circulars / notifications.
are Its Vision is to make the Indian indirect tax collection, an efficient, seamless and
as
an Compliance friendly mechanism comparable with the best in the world.
d
to
the E. LIFE INSURANCE CORPORATION OF INDIA-
soc
iall
y Life Insurance Corporation of India, hereinafter known as LIC, is the largest Insurer in
an India, servicing more than 220 Million In-force Policies, through 2048 Branch offices and
d
ec nearly 200 satellite Branch Offices. LIC has more than 1 million Agents, which includes
on Corporate Agents. LIC today sells more than 30 million new Policies in a year.
om
ica The objectives of LIC are as follows-
lly
ba
ck
wa
rd
cla
sse
s
wit
h a
vie F. INDUSTRIAL DEVELOPMENT BANK OF India (IDBI)
w
to
rea IDBI Bank is one of leading public sector banks of India. It was set up as the private
chi banking arm of erstwhile Industrial Development Bank of India (IDBI) in 1994. IDBI itself
ng
all
ins
ura
ble
per
was established in 1964, by an act of the Parliament, as a wholly owned subsidiary of the
Reserve Bank of India to catalyse the development of a diversified and efficient industrial
structure in
the country based on national priorities. IDBI played a significant role in the industrial and
economic development of the country for over 40 years as a development financial institution
(DFI). In 2005, IDBI transformed itself into a full-service commercial bank after merging its
commercial banking arm, IDBI Bank, into itself. More recently, the amalgamation of United
Western Bank (UWB) with IDBI Bank gave the latter the much needed branch network to
enhance its retail presence.

The Union Government had announced Agricultural Debt Waiver and Debt Relief Scheme,
2008 to provide debt waiver/ relief to marginal, small and other farmers. IDBI Bank has
implemented the Agricultural Debt Waiver and Debt Relief Scheme, 2008, announced by the
Union Government

Chapter 6 – conclusions
Chapter 7. – BIBLIOGRAPHY
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http://www.networkideas.org/ideasact/sep08/S_L_Shetty.pdf

http://www.oecd.org/dataoecd/59/45/42983414.pdf

http://www.ilo.org/wcmsp5/groups/public/---asia/---ro-
bangkok/documents/meetingdocument/wcms_101591.pdf

http://www.isb.edu/EMFConference/File/TNSrinivasans.pdf

http://www.raubikaner.org/data/assets/documents/Address-Shankar%20Acharya.pdf

http://www.EconmicsubboxedBlogSpot.Com