Management Notes

Reference Notes for Management

IFCI stands for ______________.

IFCI stands for ______________.


A. Industrial finance corporation of India.
B. Institutional finance corporation of India.
C. Industrial funding corporation of India.
D. Indian finance corporation and institution.

The Correct Answer Is:

A. Industrial finance corporation of India.

The acronym IFCI stands for the “Industrial Finance Corporation of India.” IFCI holds a pivotal position in India’s financial landscape, playing a significant role in promoting industrial growth and development in the country.

This institution was established in 1948 as the first Development Financial Institution (DFI) in India and has since been instrumental in providing long-term financial assistance to various industries and infrastructure projects.

IFCI’s primary objective is to support industrial and infrastructural development by extending financial assistance to deserving projects. Its role goes beyond just providing financial aid; it actively participates in project appraisal, monitoring, and guidance. Here are some key functions and objectives of IFCI:

  • Financial Assistance: IFCI provides both long-term and medium-term financial assistance to industrial and infrastructure projects. This financial support comes in the form of loans, equity participation, and underwriting of securities.
  • Promoting Industrial Growth: IFCI plays a crucial role in nurturing and promoting industrial growth in India. It identifies strategic sectors and industries that require funding for expansion and development.
  • Project Appraisal: IFCI conducts rigorous project appraisal to ensure that the projects it funds have a high probability of success. This minimizes the risk associated with lending and investment.
  • Guidance and Monitoring: The institution doesn’t limit its involvement to merely disbursing funds. It actively monitors the progress of projects it supports, providing guidance and assistance to ensure their successful implementation.
  • Development of Capital Markets: IFCI has contributed to the development of India’s capital markets by underwriting and purchasing shares and debentures, thus facilitating the raising of funds by various companies.
  • Research and Consultancy: IFCI conducts research and provides consultancy services in areas related to industrial and financial matters, sharing its expertise with the industry.

Why the Other Options are Incorrect

Now, let’s explore why the other options provided are not correct:

B. Institutional Finance Corporation of India:

This option is not correct. While it shares some similarity in wording with IFCI, the actual name of the institution is “Industrial Finance Corporation of India.” The term “Institutional Finance

Corporation of India” is not the correct name of the organization. The incorrect term “Institutional” does not accurately represent the organization’s role as a development financial institution.

C. Industrial Funding Corporation of India:

This option is not correct. The organization’s official name is “Industrial Finance Corporation of India,” not “Industrial Funding Corporation of India.” The term “finance” is more indicative of the institution’s purpose and operations.

While funding is certainly part of what IFCI does, the word “finance” better captures the comprehensive nature of its services, including financial guidance and support.

D. Indian Finance Corporation and Institution:

This option is not correct. It is a combination of terms but does not accurately represent the name or purpose of the organization.

The organization’s name is “Industrial Finance Corporation of India,” and it primarily focuses on industrial finance rather than being a generic “finance corporation and institution.” The inclusion of “Indian” is also not a part of its official name.

In summary, the correct answer is indeed A, “Industrial Finance Corporation of India” (IFCI). This institution has been a key player in India’s industrial and infrastructure development since its inception in 1948.

Its multifaceted role, which encompasses providing financial assistance, project appraisal, guidance, and monitoring, underscores its significance in driving economic growth in the country.

While the other options presented in the question contain elements that resemble the correct name, they do not accurately reflect IFCI’s actual name or its specific mission and functions. The correct answer, A, is essential knowledge for understanding the role of IFCI in India’s economic development and financial sector.

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