Management Notes

Reference Notes for Management

______________ is the first development bank of the country.

______________ is the first development bank of the country.

 Options:

A. ICICI.
B. IDBI.
C. SFC.
D. IFCI.

The Correct Answer Is:

  • D. IFCI.

The first development bank of India is indeed the Industrial Finance Corporation of India (IFCI). Let’s delve into a detailed explanation of why this is the correct answer and why the other options, ICICI, IDBI, and SFC, are not the first development bank of the country.

IFCI – The Correct Answer:

The Industrial Finance Corporation of India, commonly referred to as IFCI, holds the distinction of being the first development bank in India. It was established in 1948, right after India gained independence from British colonial rule. IFCI was created with the primary objective of providing long-term financial assistance to industries in the country.

The primary focus of IFCI was to support the growth and development of industrial projects in India by offering them financial assistance in the form of loans and other financial instruments. The establishment of IFCI was a crucial step in promoting industrialization and economic development in post-independence India.

IFCI played a pivotal role in channeling funds into various sectors of the economy, including manufacturing, infrastructure, and services. This was a key factor in India’s economic progress and development over the years. The bank’s activities have contributed significantly to the growth and expansion of the industrial sector and have had a positive impact on the nation’s overall economic development.

Why the Other Options are Not Correct:

A. ICICI:

ICICI, which stands for Industrial Credit and Investment Corporation of India, is indeed a prominent financial institution in India. However, it is not the first development bank of the country. ICICI was founded in 1955, which is several years after the establishment of IFCI.

ICICI primarily started as an initiative to provide project finance to Indian businesses and industries. While it has played a significant role in the economic development of India, it does not hold the distinction of being the first development bank.

B. IDBI:

The Industrial Development Bank of India (IDBI) is another essential financial institution in India. It was established in 1964. IDBI was created with the specific objective of promoting and developing industries in India.

Although it is an instrumental institution in providing financial assistance to industries, it was founded many years after IFCI, which was formed in 1948. Therefore, IDBI cannot be considered the first development bank of the country.

C. SFC:

The term SFC is not explicitly identified with a single institution, and it is not a widely recognized abbreviation for a development bank in India. SFC could stand for various entities or organizations, but none of them can be considered as the first development bank in India. Without a specific reference to an institution called SFC, it is not a valid option for the first development bank.

In conclusion, the first development bank of India is indeed the Industrial Finance Corporation of India (IFCI). IFCI played a pivotal role in channeling funds into various sectors of the economy and supporting industrial growth and development in India after gaining independence.

While ICICI and IDBI are significant financial institutions, they were established after IFCI and therefore cannot claim the title of the first development bank. The option “SFC” lacks specificity and does not represent a known development bank in India. So, the correct answer is D. IFCI, as it is a historical and factual assertion in the context of India’s financial and economic development.

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