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236 Financial Management<br />

<strong>financial</strong> institutions. Further capital can be raised with the help of issue of shares,<br />

debentures and accept deposits from public.<br />

Objectives<br />

Industrial Reconstruction Bank of India was established mainly for rehabilitating sick<br />

industrial units in India.<br />

• To identify and remedial measures to sick industries.<br />

• To provides <strong>financial</strong> assistance to reconstruction of sick industrial units.<br />

• To promote the sick units into profitable units.<br />

Functions<br />

The following are the major functions of the Industrial Reconstruction Bank of India Credit<br />

and reconstruction agency for industrial revival modernization, rehabilitation, expansion,<br />

reorganization, diversification and rationalization. Empowered to grant loans and advances:<br />

• Underwrite stocks, share and bonds.<br />

• Guarantee loans and advances, performances and deferred payments.<br />

• Gives assistance for capital expenditure, addition of balancing equipment etc.<br />

Management<br />

Industrial Reconstruction Bank of India is managed by the Board of directors with a full<br />

time chairman. Directors are nominated by central government, Reserve Bank of India,<br />

Schedule <strong>com</strong>mercial Bank and <strong>financial</strong> institutions.<br />

Subsidies of Industrial Reconstruction Bank of India<br />

On March 27 1997, Industrial Reconstruction Bank of India was transformed into<br />

Industrial Investment Bank of India Ltd (IIBI) under the Companies Act. IIBI acts as a<br />

coordinating agency in the field of reconstruction.<br />

Working Result<br />

Industrial Reconstruction Bank of India sanctioned <strong>financial</strong> assistance to various sick<br />

industrial units. Industrial Reconstruction Bank of India sanctioned Rs. 92 crores in 1980–<br />

81 but it has increased to Rs. 4526 crore in 2002–03. It contributed 80% of the <strong>financial</strong><br />

assistance at all over India.<br />

STATE FINANCE CORPORATION (SFC)<br />

Origin<br />

Central government decided to promote the Small Scale Industries and Medium Scale<br />

Industries at the state level by establishment of State Finance Corporation under a special<br />

Act. It is called as State Finance Corporation Act 1951. According to this act, state<br />

government have been empowered to set up State Finance Corporation. At present these<br />

are 18 State Finance Corporation in India.

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