Mba Second Semester Curriculum

MBA(EXEECUTIVE/RETAIL) II SEMESTER BUSINESS ENVIRONMENT ASSIGNMENT-I 1 Discuss how does the environment acts as a stimulant to business. Analyse why business often does little for physical environment preservation despite the fact that it is significant for business activity. 2. Analyse the Monetary and Fiscal Policies practiced in India in recent years. How far shall they be effective in curtailing the recent spurt in inflation? 3. How far does Indian corporate discharge its social responsibilities?Illustrate your answer with suitable examples 4. Do you think that the present economic environment is favourable to business? Discuss and give your suggestions. Describe the various components of external environment that influence the business policy of an organization. 5. Explain the industrial policy of Indian government and changes that happened from 1980 till date. Why is year 1991 a watershed year in the economic history of india? ist and explain in detail what changes and reforms have taken place since 1991. ASSIGNMENT-II 6. The Chief Executive of Samsung Electronics recently told its employees that, â€Å"We must begin anew. Most of Samsung’s flagship businesses and products will become obsolete within ten years. † This corporate strategy of reinvention would inevitably involve significant change for employees. Do you think that technology transfer is likely to be the biggest problem for a business that wants to reinvent itself?Justify your answer with reference to Samsung Electronics and/or other organisations that you know. 7. Mr. Subhash, an NRI of your locality seeks advice to invest his money by starting an IT based industry. Give suggestions to him regarding the investment friendly climate in Madhya Pradesh, in the light of new industrial policy of the State Government. 8. How does the change in profile of customers affect your business environment? 9.Elucidate the external environment of business and its components in the context of a c ompany in the retail sector. List some elements of external environment you would want to scan to improve profits of a retailing business you may own in future? 10. How many dimensions of business environment are changing for the banking industry. What measure does the central bank take to control inflation? Explain the impact of this change on business environment. ************

How Each Piece of Legislation Will Influence Working Practices in the Setting? Essay

The Children Act 1989 has influenced setting by bringing together several sets of guidance and provided the foundation for many of the standards practitioners adhere to and maintain when working with children. The Act requires that settings work together in the best interests of the child and that they form partnerships with parents and carers. It requires settings to have an appropriate adult: child ratios and policies and procedures on child protection. This Act has an influence in all areas of practice within setting. For example; planning. 2. ) Disability Discrimination Act 1995 (DDA 1995)- The DDA states: â€Å"settings are required to make reasonable adjustments by either changing policy, providing alternative ways to access a provision, or by addressing physical features which make a service impossible or unreasonably difficult for disabled people to use. † (www. hse. gov. uk/disability/law. htm) This means that settings must make their provision more accessible. For example; by having downstairs toilets, wider doors and ramps to the front doors. . ) Children Act 2004 – This Act was introduced as a result of the death of Victoria Climbie and was the introduction of ‘Every Child Matters’ which ensures the wellbeing of children through its five outcomes. The Every Child Matters framework has influenced settings by giving them and other childcare settings a duty to find new ways of working together by sharing information and working co-operatively to protect children from harm. 4. ) Human Rights Act 2000 – This Act has had a huge impact in current legislation in the UK. Under the Act it was agreed that children would have the same rights as adults which means children have the right to dignity, respect and fairness in the way that they are treated. In terms of working with children the articles that relates to this Act are Article 8 which is about the right to privacy, Article 10 the right to freedom of expression and Article 14 discrimination. This legislation has also affected the main principles which underpin working with children. 5. ) Race Relations Act 1976 – The Race Relations Act 1976 aims to express ethnic discrimination. In 2000 there was an amendment to the Race Relations Act which reinforced some of the necessities of the earlier legislation and make settings work towards racial equality. In practice this means that a setting must be alert on how they promote their service, recruit staff and make the provision accessible to all. Following the Act, â€Å"the Commission for Racial Equality was established in order to help enforce the act, and also to advise the Government and others on issues concerning it.

Assignment 2-3 Example | Topics and Well Written Essays - 750 words

2-3 - Assignment Example This illustrates the separation. Though they cannot explain it to themselves they very well know there is something strange about the ring. While still in The Shire they encountered Ringwraiths. It scared them like hell but they continued the journey and decided to cut through the Old Forest. They stopped by the town of Bree where they met the Strider a man whose name truly is Aragorn. Aragorn protects them from the Ringwraiths who wreaked havoc in Bree. In their journey, with Ringwraiths in close pursuit Frodo, Samwise, and Aragorn becomes acquainted with the Council of Elrond. The learned council knows about Saruman, a wizard whom Sauron has corrupted, the apparent escape of Gollum from Mirkwood, and most importantly about the powerful ring inherited by Frodo. The Council recognizes that the threat is far too great and decides that the best course to take is destroying the ring. Frodo, as the keeper of the ring, volunteers to take the ring to the Cracks of Doom—the one place where the ring has been forged. This initiates Frodo to become a part of the Fellowship of the Ring; a group composed of nine so chosen to accompany Frodo in his invaluable task. Among the members of the Fellowship is of course is trusted friend Sam, cousins Merry and Pippin, the man they met at Bree named Aragorn, Gandalf the Grey, Gimli (who happens to be the son of Gloin, one of the dwarves that accompanied Bilbo Baggins on his quest), Legolas (an el f from the woodland realm of Mirkwood), and another man named Boromir from Gondor. The Fellowship endure numerous challenges including attacks by the Orcs while passing through the Mines of Moria, Gandalf falling through a deep chasm in his battle against Balrog, and Boromir yielding to the extensive powers of the Ring which lured him to take it away from Frodo. With this happening Frodo leaves the Fellowship, trotting the road to Mordor followed only by Samwise

Construction Management Techniques Essay Example | Topics and Well Written Essays - 1500 words

Construction Management Techniques - Essay Example Unlike bureaucratic structures, those administrative systems offer every individual to work as a unit of a hierarchy to concentrate only over a segment of work to enhance his capabilities of production as a human resource. Consequently, it becomes the main responsibility of an individual to cope with the other parallel and serial units of hierarchy in a way that provides a smooth workflow throughout the structure and enhances the overall capability regarding quality and quantity of outcomes. This synchronization of individuals depends chiefly on the communication and information modules that individual fulfills. And, resultantly, communication and information framework becomes the utmost important area to be attended by the individuals as well as the administrative authorities. Task 1.b Depending chiefly to the basic framework and applied strategies, measure of company’s performance is rooted in the fact for how much it can comply with its mission statement that manifests the chief goals set by company. When a company spreads its dimension and transforms from medium to large company, it necessarily requires a metamorphosis of its applied strategies while still being firm to its ground framework which assures that company’s dealings will serve the continued purposes that had brought the company to a stage offering such transformation. Thus, a transformation from a medium to a large company requires a long term plan that initiates with the formula strategies of the company to the new offering that company achieves with expansions. Mostly, new demands also require building new strategies for specific cases. It is must to be farsighted and preplanned for such expansion which is only possible if a full plan is preset with the possible options and alternatives for tasks upcoming with forwarding and transforming. Task 2 Pre-construction requirements As the construction at Santiago way requires a small portion with two flats and a pair of semi detached ho use, the whole construction will require some earlier steps that will serve as the base strategy of the constructions. First of all, the documentation and authorization will be required to be locked before the site survey and construction planning. It will include a construction certification and council approving. Once the documentation and legal procedures are over, company may lead to site survey that will include an analysis of current and earlier weather, soil and ground condition. Overall pre-construction will finish up with the following steps: Legal documentation and authorization Earlier to site survey, a construction agreement and council permission will be required. Construction may lead to involve in various steps that involves excavation, refilling, noises and temporary hurdling of pathway that will be clearly mentioned in the documentations. Construction environment Survey History of the construction will be analyzed over the standard patterns. Estimated climate condit ions, quality of soil, underground scab, domestic colony development plans, electric and water supply inlets and outlets will be examined and included in the survey. Site survey Regular visit to the site will involve a number of examinations over the elevation of the site and its foundational depth resting of underground layer. Various elevations and earth crust deformations will be mapped to find out how much space, equipments and labor

Rational & Implications Assignment Example | Topics and Well Written Essays - 500 words

Rational & Implications - Assignment Example Faith is therefore put on the architectures and their effective work. Implication: Changes in information technology and other business issues require the facilitators of that change to keep on changing too if the organization is to continue being relevant in their work and keep up with the competition. Implications: The future is unknown based on previous knowledge of how changes keep taking place. Short-term workable goals and plans are the way to go if the plans are to be deemed useful and not redundant and backwards. Short-term projections keep the resources intact and help to uphold the currents laws and policies. Rationale: They are the driving wheels behind the organization’s successes and change facilitation and hence the best to be on the forefront of ensuring standard business processes and also ensure the environment the organization is operating in is common. Implications: Policies and laws are tied directly to this principle and so its correct implementation will save resources and time. Consolidation of such important duties to one sector reduces issues of data loss or mismanagement since the responsibility lies in the chosen few. Rationale: Usefulness of data depends on the credibility and reliability of the data collection process and those who participated in the process. The same is true when it comes to products by the architectures. Their reliability and credibility are dependent on the process and the people involved. Implications: Flaws in the process renders the products useless and hence a waste of resources and time. Measures to ensure credibility and reliability of the products from the process to the people involved are adamant for the success of the organization or business as a whole. Rationale: They specialize in producing the best by use of as minimally as possible technicalities that cannot be understood by majority. They simplify the work and make it more accessible to the majority and hence

Introduction to the Bacteria Research Paper Example | Topics and Well Written Essays - 1000 words

Introduction to the Bacteria - Research Paper Example Bacteria differ in their nature as some contain additional features such as flagella, which helps them in moving and protecting the slim capsules. They also exist in varying shapes and sizes because some are rod-shaped, round, comma-shaped and spiral. Some bacteria cause diseases while many others are important to human beings as they support them in living healthily (Storey 339). The useful bacteria exist on the skin surface, genitals and in the intestines. The bacteria found on human skin are important because they clean the waste material on the skin surface hence preventing dissimilar skin infections. The bacteria in the intestine help in the breaking up of food molecules, thus allowing the body to absorb important nutrients (Storey 340). Cause of disease and the interaction Bacterial diseases occur in different forms, therefore, for a person to avoid it, it is vital to have the knowledge concerning the disease. The bacteria cause different types of diseases ranging from skin dis eases to tuberculosis and bubonic plague. It is easy for an individual to get bacterial diseases because bacteria are single-celled microscopic organisms, hence, seeing them with a naked eye is impossible. Bacterial diseases occur because of harmful bacteria, also called pathogenic bacteria, getting into the human body. These bacteria can get in the human body through contamination of bites, eating unhygienic food, sexual contacts with the infected person, sharing needles and touching dirty areas. When these bacteria get into the human body, they initially enter the blood system, where they find a good environment with optimal conditions for growth. Even though their growth rates are low when in blood, they reproduce considerably within a few days (Storey 342). A bacterium is capable of causing diseases such as throat and ear infections to children. In addition, the bacteria can also cause other diseases to adults, for example, tuberculosis, plague, syphilis, and cholera. Bacteria c ause disease because of varying aspects, which include their toxicity, autoimmune activity such as destroying the human body tissues while others can reproduce, hence increasing their presence in the body. This affects the body working mechanisms. Bacteria become harmful to the human body because too many of them produce toxins that have chemicals that cause inflammation and kill nearby cells. These toxins are capable of causing diseases because the bacteria producing them reproduce, hence, increasing the amount of the toxins. Therefore, these bacteria create holes within the cell membranes, killing the cells. Such bacteria negatively affect the immune system of the human body thus leading to internal bleeding and damage to the body. Pathogenic bacteria also culminate in varied infections and diseases in human beings. The bacteria infect the human body, multiplying and reproducing at a very high rate within different vestigial organs (Storey 343). The bacteria also stick on the cell membranes, destroying them and spreading infectious diseases among individuals. In addition, the bacteria found on the skin of humans are also capable of causing different types of diseases. These bacteria are responsible for causing and spreading infectious diseases, which include bubonic plague, a life-threatening disease. Bacteria of Yersinia pestis variety cause this disease. Bubonic plague occurs in different forms commonly spread by rats and fleas and then transferred to the blood system of the human body. The incubation rate of this infection ranges from two to seven days (Storey 343). Cholera is also among the common diseases resulting from bacterial infections.  Ã‚  

Genres Essay Example | Topics and Well Written Essays - 250 words

Genres - Essay Example The other type is the narrative genre in which the type of plan or scheme is defined. The types of the narrative genre are comedy, tragedy, satire and romance. Here are the few examples of genres that are used in literature. Informational genre is aimed for teaching and other informational purposes rather than entertainment. Examples include The Reasons for Seasons, Lightening etc. Realistic genre is based on reality or gives illustration about things in literature or art as they really are. Examples include Drawing Lessons, Plain and Tall etc. Fantasy is an imaginative genre and is used especially when one dealing with unnatural or mystical characters or proceedings. Examples include The Book of Three, The Dark Is Rising etc. (Routman,2005) The study of genre has following advantages as it helps to categorize literature in a means that make it easy to understand the distinctive characteristics. This can help in relating different works of literature and offer a basis in evaluating

Leadership and culture Coursework Example | Topics and Well Written Essays - 1000 words

Leadership and culture - Coursework Example These roles may come with challenges. The manner in which leaders overcome these challenges would depend majorly on major traits and philosophies within a given leader. The major concepts of this theory are the personal composition of leader based on their physical appearance and cultural background. These cultures mould a leader and aid him or her in matters decision making and management of a given organization. Leaders aligned to this theory tend to focus more on their intellectual ability to manage a given situation. The most important aspect in this theory is the cognitive ability leader in determining what is essential at any particular period (Northouse, 2010). The leader is guide by principles within a given organization and she or he utilizes them to attain specific goals. A leader under this theory may create his own environment to influence his or her skill or modify existing environments and enable him manage a given organization. There are two major roles of a leader within a given organization. These roles include conflict resolution where the leader is required to guide an organization through challenges (Northouse, 2010). The second role entail mentorship where a leader is required to mentor individuals based on their personality and use their traits to ensure the process is a success. The two roles determine a leader through the trait theory. The theory outlines how leaders are separated through specific characteristics. The theory outlines the nature in which a leader succeeds of a given leader is determine by his or her behaviours. These behaviours are essential in a given organization. The theory organizes leaders into three major categories. The first category identify leaders that aim at gaining control over a given group and that the concrete on an entire organization and uses its structure to plan. The second set of leaders under this theory is those who are interested in the wellbeing of the organization and

Managerial Decision Making Bachelor Essay Example | Topics and Well Written Essays - 3000 words

Managerial Decision Making Bachelor - Essay Example The focus will be on the need for heart failure specialist nurses in the community and how they can improve health care in the UK. The 80-year-old female patient I have chosen to discuss here appears to fit the overall criteria for the above study, which was mainly focused on previously hospitalized patients with interventions through specialist heart failure services in the community. My client was diagnosed with heart failure two years ago and had one additional admission to hospital about one year ago for exacerbation of her heart failure. She felt she had not been given adequate information on her condition. She was referred to community heart failure nurses for education, management and titration of Carvedilol 6.25mg bd. Other heart failure medication prescribed included furosemide 80mg mane, spironolactone 25mg mane and ramipril 5mg bd. The spironolactone was stopped due to increased potassium, urea and creatnine, a decision based on the RALES study (2003). After another admission for chest infection, she was discharged without furosemide, and I was assigned as a community heart failure nurse. She was con cerned about having her furosemide discontinued, and it was recommenced after I contacted the physician. The client feels more secure knowing she has someone to contact rather than "bothering" her doctor, and we have developed a good rapport. I am working with her on pharmacology issues, making sure she is responding well to her medications as well as taking the right medications. Heart Failure - Major Health Problem Heart failure has continued to be an escalating public health problem. Chronic heart failure is the "syndrome of breathlessness, fatigue and fluid retention resulting in impaired ability of the heart to pump properly" (Sanderson, 1994, par. 1), often following a heart attack. By the end of the 1990s, 5% of all medical admissions to hospital in UK were related to chronic, or congestive, heart failure (Bosson, 1997). The Department of Health considers it a major concern because there is no cure at present. It therefore has a dramatic effect on the quality of life, and if not properly managed in the community it can also place very heavy pressures on hospital beds through emergency admissions and re-admissions (DOH, 2003). Local GPs in a 2005 clinical audit who had access to a specialist CHF nurse considered the service far more important than did the GPs without a specialist nurse. Even with the existence of guidelines, the treatment for heart failure in UK continues to be suboptimal, a concern which makes the specialist CHF nurse increasingly valuable (Leslie, 2005). The 80-year-old female client whose care I am monitoring no doubt will find herself increasingly dependent on others, and if she doesn't have proper treatment her quality of life will be greatly diminished. The purpose of this paper is to determine whether this type of care in the community not only will lessen the need for hospital inpatient care but ultimately will

Little Speech on Liberty Essay Example | Topics and Well Written Essays - 250 words

Little Speech on Liberty - Essay Example According to him, liberty is ‘twofold’: first one is natural and grants the man freedom to do whatever he wishes, good or evil; the second one is freedom granted by federal authority that limits his freedom within defined parameters. Winthrop emphatically asserts that first type of personal freedom often makes beast of a man and makes him act in manner that could harm him or others. The civil or federal freedom is important as it safeguards his as well as others’ interests and welfare. It ensures that individuals’ liberty does not adversely impact others or oneself. It is like the freedom of choice given by Church who makes it God’s order that man must act for the good of others and evil acts are against God’s covenant. Winthrop speech is to exonerate his actions in the court which had resulted in his impeachment. Though he was later acquitted, his speech has amply implied that harsh actions taken were broadly in the wider welfare of the persons and public at

Current Trend in Management Essay Example for Free

Current Trend in Management Essay The management should recognize the important role of human resources management in order to successfully guide organizations towards profitability. It is essential for the management of investment and time-consuming and the amount, to see change scenario for the human resources department in the 21st century. In order to stay competitive and be in the race, and human resources management should consciously update itself with a shift in human resources, and be aware of the human resources issues cropping up. With high attrition rates and poaching strategies of competitors, and there is a huge shortage of skilled staff, and therefore, the company human resources activities play a vital role in combating the crisis. Should be put in the appropriate human resource policies that would lead to the organization as well as the individual s goals. And human resource managers to manage all the challenges facing staff recruitment, training them, and then develop strategies to retain their career and build an effective management system for them. That just taking care of employees will not be enough; new initiatives for human resources should also focus on the quality and productivity needs, and direct clients and stress, teamwork and leadership building. This book is divided into two parts, which sheds light on the emerging trends in human resources, and discusses the issues of human resources in various industries such as financial services, information technology, energy and health care, for example a few. It should be the value of this book is to practice human resource managers in each institution, as well as for those who have a great interest in the field of human resources management, to realize the increasing importance of human resources and understand the need to build human resources effective strategies to combat human resources issues emerging in the 21st century. Has evolved Human Resource Management Introduction to a large extent over the past century, and has seen a major shift in form and function primarily during the past two decades. Led a number of large forces environmental internal and external, progress has been made in the management of human resources function maintenance to a large extent, with little if any impact down the line, why many scholars and practitioners regard today as a source of competitive advantage for sustainable organizations operating in the global economy. Changes in human resources management: some significant changes that are likely to take place in the management of human resources are as follows: An increase in the levels of education: Due to the technological progress and the spread of educational institutions, workers will become increasingly aware of the needs of a higher level, managers must develop appropriate policies and techniques to motivate knowledge workers. Better-educated workforce and greater demand management assessment and self-governance in the workplace. Technological developments: This will require re-training and vocational training in the middle of each of the workers and managers. The rise of an international company to prove new challenges for individuals and function. Change the composition of the labor force: In women, in the future, minorities, SCs and STs become an important source of manpower in the future at the expense of ease of access to better education and employment opportunities. Therefore workforce planning will from each organization to take into account the possibility of the availability of talent in these groups. And will change the mix of the workforce leads to new values ​​in organizations. Increase the role of government: In India and management, personnel have become so certified. Will be required in private institutions in the future will be to coordinate its programs with those welfare work in the government sector, especially the increasingly to support the governments efforts to improve public health and education, training and development and infrastructure. Occupational Health and Safety: Because of the existence of the legislative and the trade union movement, and management personnel should be more health and safety conscious in the future. OD: in the future, and will have started to change and able to improve organizational effectiveness. And senior management will become more actively involved in the development of human resources. New work ethic: more troops will be on the forms of the project and a team of the organization. And change the work ethic requires a greater focus on the individual. You will have to redesign jobs to make the appeal. Development planning: Will be involved personnel management are increasingly in organizational planning, structure, and composition etc.. This will require greater awareness in terms of cost and profit based on attitudes on the part of the Department of Personnel. Better evaluation and reward systems: There will be a need to post the highest gains patrol organizations with the goal and the result more workers compensation-oriented systems performance and linking performance evaluation will have to be developed. New personnel policies: This will require the adoption of new and better policies for the labor force in the future. The traditional family management to give way to professional management with greater forces on human dignity. Hence, it will be in personnel management in the future cope with new challenges and new responsibilities performance. And will take place participatory leadership authoritarian leadership. And creative skills must be redone and rewarded the focus will shift from a legally binding approach and rule to a more open and humane. Recent trends in human resources Human Resource Management is the process of bringing people and organizations together so as to achieve the objectives of each other. The role of Director of Human Resources continues to shift from the role of protector and sort of the role of planning and agent of change. Management personnel are the new heroes of companies. The name of the game today in business is individuals. At present it is not possible to show good report your financial or operating only personnel relations are in order. Over the years, a high degree of skill and knowledge based on increasing employment opportunities while jobs that require low skills are diminishing. This calls for the appointment of skill in the future through human resource management initiatives occasion. Indian organizations have also experienced a change in systems and cultures and management philosophy due to the global alignment of Indian organizations. There is a need to develop multiple skills. The role of human resource management is becoming more important.

What is quality management?

What is quality management? Question 1 (a)Benchmarking Benchmarking measures performance or quality aspects against a competitor or industry standard. For example we could benchmark the profits made on internal projects. The importance of benchmarking is that it continuously assess the companys performance results against that of its competitors and helps implement good practices to achieve set targets, improve efficiency and to maintain competitiveness. It is also important in decreasing the risks linked with change by observing what factors contributed to the success of other companies. (b) 7-Run Rule The Seven Run Rule, is a technique used for quality control and its importance lies in the fact that it can be used to identify non-random problems when using control charts. It is normally an automatic process whereby alerts are generated when there is a significant variation in output. It helps by determining the non-random problems by evaluating progression of specific characters for the development of products characteristics (for e.g. the no. of defects in software) which could occur in a minimum seven time period. It allows the project manager to see the processes that are out of control, thus he is able to identify the causes of these non-random events and make adjustments to the process to correct or eliminate them (c) International standards There are many tools for quality management, including quality standards and models. Some of them are: ISO 9000:2008 Capability Maturity Model (CMM) Capability Maturity Model Integration (CMMI) ISO/IEC 9126 Software engineering ISO 15504 also known as SPICE Quality can be defined as exceeding customer needs and expectations throughout the life of a product. When we build a system, developers are looking for performance and comply with the users requirements and how well it meets the users needs fitness for use. But it happens that the system developed which is in conformity to the requirements may at the end not please the customer who is becoming more conscious about the quality of the product he is paying for. Customers are more comfortable if they see that quality is being addressed during the project. Nowadays customers requirements/needs are very high, their quality aspects have got much better, they are more demanding now compared to some time back and thats why we have customers issue management. The International Standards are important because they provide rooms for performance improvement in potentially all the activities undertaken by the organization by adopting a systematic and scientific approach to managing the organisation processes/deliverables so that they consistently deliver a product/service as per customers expectations. These processes can be quite easily managed and monitored. In return they improve and ensure that appropriate quality of service is provided to customers and as such the level of customer satisfaction automatically gets increased. Additionally International Standards are also important in helping organisations to provide a kitemark seal of approval for customers and suppliers so they know that the work of the company is of a high standard. (d) Delphi Technique We know that the higher the number of participants in a meeting, the decision making process takes longer in terms of time due to devils advocate. The meeting can get monopolised by the devils advocate whose eccentric views can reach unjustified significance and prevent the group to find consensus. We also know that in a face-to-face discussion, situations of groupthink can occur. This can lead to poor decision making which in turn leads to decrease in quality. So, to avoid such negativities, the Delphi technique is used instead. The importance of Delphi technique is that it decreases such disadvantages towards decision making in groups and creates conducive working environment whereby the probability of groupthink is zero. Anonymity allows the participants to express their opinions freely, promote frankness and avoids approving errors by reviewing earlier forecasts. Its aim is to ensure that everyone gets a fair and equitable chance to express their viewpoint, identify areas where there is agreement or disagreement and try to find consensus. It significantly improves processes of meetings to ensure the quality of deliverables and rapid decisions being taken. Question 2 (a) Net Present Value NPV recognises the value of a dollar received today to the value of that same dollar received in the future, taking into account all cash flows occurring over the duration of the project. Hence, it is said to be a measure of the true profitability of projects. The importance of NPV is to help project managers in the selection of projects by evaluating and prioritising potential projects. If the NPV of a potential project is positive, it should be accepted. However, if NPV is negative, the project should probably be rejected because cash flows will also be negative. According to the value additively principle, if we know the NPV of individual projects they can be added together and hence the value of the firm will increase by the sum of their net present values (NPVs). (b)Return on Investment ROI is the basic tool used to assess both profitability and performance and also to prioritise IT projects. It is calculated by dividing the net benefits of a project by the initial cost of the project. It is possible to identify the percentage return for each cost unit invested by multiplying this value by 100. For projects lasting more than a year we need to use discounted values to take account of the effect of inflation. The importance of ROI is evaluating the financial impact of a project before a project can be started. Negative ROI is bad and means that costs are larger than benefits. High positive values are good and the higher the better. ROI is also used in the project selection process, with investment made on those projects with the highest ROI. (c) Break†even point The break-even point is defined as the point where sales or revenues equal expenses. There is no loss incurred or profit made at the break-even point. Break-even point is important for managers for taking the right decisions. For example it helps the management in knowing the lowest number of units that could be produced to at least earn so much to cover the cost of production without profit or loss.. It helps the management to estimate up to which level sales can be reduced but even though achieve some kind of profit from production and sales or how much costs can increase to even then company at profit point and can survive loss position. (d) Parametric modeling Software cost estimation is difficult, we have several methods and one of the methods is Parametric modeling which is a mathematical model using project characteristics to extrapolate from previous project data, for example in the COCOMO model the number of Lines of Code is one parameter to use when estimating the cost of a new system. It is done at the beginning of the project and is helpful to project managers who are inexperienced in software cost estimation. Parametric modeling is only as good as the model and historic data allows and requires skilled staff to apply the formulae and interpret the results. Parametric modeling also considers several aspects related to the resources required: staffing and costs related to hardware and software required. Question 3 (a) McClellands Acquired Needs Theory As per McClelland our needs are categorized into three aspects: Achievement Affiliation Power Considering my case, currently   I am working as an ICT System Support Officer at the SSR International Airport where I am required to work on shifts and have many deadlines to respect. I can categorise my needs as follows: Achievement My aim is to become the companys next System Administrator who is the next post on the hierarchy and have my salary raised which is symbolise progress and achievement. Power I know that if I attain this post I will need to know how to deal with my co-workers and the user community. I also need to know how to use the institutional powers given to me by the management to organise the efforts, motivate, influence and manage my subordinates. This is essential for me so as to keep control of all the works and do ensure that the goals and objectives of my company are achieved. Affiliation Also, at this position it is going to be important for me to meet and learn from other System Administrators know-how and experience which are indeed important through network interactions. I also know that at this position interaction with other people in the same position is important for sharing of knowledge, skills and tips. (b) The Meyers†Briggs Type Indicator As per Meyers†Briggs Type Indicator we use a four-scale structure for identifying the personality and categorising a persons behavioural preferences: Extrovert/Introvert Sensation/Intuition Thinking/Feeling Judgment/Perception Considering my case, I categories myself as an Extrovert/Introvert I am an Extrovert person, I always discuss new ideas and tentative solutions to problems with my fellow colleagues before they are finalised. Another example is when I am participating in meetings with the top management, I do not hesitate to voice out my opinion or solution to a problem even if I am not sure if the solution is viable or not. But before that I will warn them that we are just suggesting and trying to come up with a fully working solution. Sensation/Intuition I am Intuitive, for example, where I work we have some 600 CCTV cameras which are constantly under surveillance by the Control Room Operators. Lastly we have been experiencing several slowdowns of the system and frequent problems with the workstations used by the operators. Being an intuitive person I have felt that the number of complaints has increased too much which is unacceptable. Instead of carrying a survey on the data storage capacity of our Video recorders, CPU usage, RAM usage or network bandwidth which can be done later I will try to convince the management that we urgently need to buy spare servers for our Digital Video Manager database, Access control servers, video recorders and spare workstations due to the fact theses equipments are nearing their end-of-life since they were purchased in 2006. Thinking/Feeling I have a preference for Thinking but sometimes I can be of the Feeling type too. It happened once where we were busy completing a project whereby we had to configure Microsoft Outlook with the new settings for some 600 users. We have stopped using Microsoft Exchange and using Google Apps instead. We had to complete this job in 10 working days with a workforce of 5 technicians. We were on track and 3 more days left to finish the work, then 1 technician requested 2 days off since he was aggrieved over the sudden death a close family. My Thinking preference made me weigh the effect of the two days off on the schedule and the increased workload of the other 4 technicians who now has to complete the work of their colleague. I was tempted to say NO but my feeling preference made me consider the factors from other side whereby the technicians output will be affected due to his low morale; I accorded him his two days off. Judgment/Perception I categorise myself as a Perceiver, for example when carrying out preventive maintenance on servers I prepare a rough estimate of the time taken to accomplish this task, but I will never give to anyone the estimate. This is because you never know what incidents might happen during the maintenance; some parts might get damage during cleaning/blowing for example or I may notice the beginning of hard disk failure. Therefore the original estimate will be extended due to repair or installation of a new hard disk. I would never operate as a Judger who might see the task of replacing the hard disk as a discrete task and try to complete the maintenance according to the schedule. (c) The Social Styles Profile As per the Social style profile personality of people can be perceived into four zones based on three principal dimensions of Social Style—assertiveness, responsiveness, and Versatility The four Social Styles are: Analytical, Driver, Amiable and Expressive Considering my case, I can say that I show both the Driver Style and the Expressive Style Driver I can say that I am a Driver, due to the fact that I am proactive and like to take initiative, get things done and make things happen. I constantly accept challenges and am always first into solving problems. I prefer to work within time frames and like to focus on actions that will get things done and realize concrete outcomes. Expressive I like to work fast and I like feeling the people who work with me, I am always complimenting, applause when the team has done a good job and aacknowledge the efforts put in to complete projects on schedules. Also my priorities are the user community and the stakeholders. (d) DISC Profiles As per the DISC profiles, all people share these four styles in varying degrees of intensity; D (Drive) I (Influence) S (Steadiness) C (Compliance) I am Direct and Decisive and a like to overcome obstacles and is a good problem solver. I like projects that produce tangible results. I like to discuss solutions with my team first and not afraid to speak out and is generally optimistic. I do not fear new challenges without fear. I am capable of handling several projects at the same time. Question 4 (a) Milestones Milestones are the diamond shapes we like to put in our Gantt charts. It is a kind of measurement that serves as tools to keep track of the progression and any deviation that may happen. Milestones is like the point of start of the next journey to the next milestone, and the time required and money needed will be estimated on the basis of how far we have progressed on the project and it is the number milestones that have been reached by the team. Milestones are simply short-term goals or the targets for the project team. Milestones help to boost the morale and confidence of the team who will enthusiast to go for the next Milestone. (b) Critical Chain Scheduling It is a method of scheduling that take into account the scarce resources available and which are being shared among projects when creating a project schedule. Its importance is to protect projects from the unavoidable slippages that occur in every project. It removes buffers from individual tasks by pushing them to completion in the shortest time possible and instead adds project buffer before the project scheduled completion date and feeding buffers before tasks which are on the critical path. It is a method applied to meet the tight schedule requirements that every project manager faces while, at the same time, helps companies to preserve quality and productivity. (c) Tracking Gantt Charts The importance of Tracking Gantt Chart is that it helps project managers to keep projects on schedule, make sure that tasks start and finish on schedule. The Tracking Gantt chart pairs the current schedule with the original schedule for each task and helps find trouble spots, tasks that vary from the baseline plan. Managers can then adjust task dependencies, reassign resources, or delete some tasks to meet your deadlines. (d) Reality checks Reality checks involve controlling and managing changes to the project schedule. Sometimes a task can be crushed in order to complete the project on time. Hence the importance of reality checks, it allows the project managers to know the how much buffers needs to be removed from certain tasks and redistribute it to other tasks which are lagging behind The importance of Reality Checks are that Project Managers can review the draft schedule or estimated completion date in the project charter and prepare a more detailed schedule with the project team. Also, it helps project managers to make sure the schedule is realistic and followed. if there are schedule problems, Project managers is able to alert top management well in advance. Question 5 (a) a critical path in a complex project Once I worked on a project where I had to configure a Network-attached Storage (NAS) server for the backup of CCTV Recorders and the setting up of the Tape recoders. We have already received the NAS, Dell Recorders etc, but the Cabinet for housing the equipments was not delivered on schedule due to the fact that the ship transporting the Cabinets has been attacked by the Somalian pirates. This caused the project to be completed with 40 days overdue. The configuration of the NAS which became the critical path could not be split as it has to be carried out by only one guy. (b) an effective team meeting My manager carries weekly meetings with his staff and for me his meetings are effective in the sense that there is an agenda, there is a time limit for the meeting and the meetings starts and adjourns on time. The manager ensures that talks do not stray away from original topics. There is always someone form the team assigned to take minutes of the meeting and these are sent to all members to remind them of their tasks and responsibilities. The manager always encourages the team members to speak up their thoughts. At the end of every meeting decisions are taken and everyone knows his tasks and responsibilities. The timeline of the tasks are also known to them. (c) risk mitigation that was found to be necessary I was working on a project where we had lay Fiber optic cables for the CCTV system, but during the task the team identified potential risks regarding the vulnerability of the fiber cables which could be eaten by rats. They were able to work out various mitigating strategies and came up with new type fiber cable which was more resisted to rodents and installed rodents traps and covered man holes and service ducts correctly. Indeed these risk mitigating tasks involve additional costs but was worth it and necessary. (d) crashing a task to reduce its duration Once we had to assemble 200 computers in one week with a workforce of 5 technicians working 5 days a week. Taking into account that the technicians were working on other projects too, it was quite impossible to complete the computer assembly on schedule. The only solution was to increase the workforce with more technicians from other projects in order to meet the deadline.

Industrial Development Bank of India (IDBA) Analysis

Industrial Development Bank of India (IDBA) Analysis INTROUCTION The Industrial Development Bank of India Limited, was established as wholly-owned subsidiary of Reserve Bank of India. The foundation of bank was laid down under an Act of Parliament, in July 1964. The main aim behind the setting up of IDBI was to provide credit and other facilities for the Indian industry, which was still in the initial stages of growth and development. In February 1976, the ownership of IDBI was transferred to Government of India. After the transfer of its ownership, IDBI became the main institution, through which the institutes engaged in financing, promoting and developing industry were to be coordinated. In January 1992, IDBI accessed domestic retail debt market for the first time, with innovative Deep Discount Bonds, and registered path-breaking success. The following year, it set up the IDBI Capital Market Services Ltd., as its wholly-owned subsidiary, to offer a broad range of financial services, including Bond Trading, Equity Broking, Client Asset Management and Depository Services. In September 1994, in response to RBIs policy of opening up domestic banking sector to private participation, IDBI set up IDBI Bank Ltd., in association with SIDBI. In July 1995, public issue of the bank was taken out, after which the Governments shareholding came down (though it still retains majority of the shareholding in the bank). In September 2003, IDBI took over Tata Home Finance Ltd, renamed ‘IDBI Home finance Limited, thus diversifying its business domain and entering the arena of retail finance sector. The year 2005 witnessed the merger of IDBI Bank with the Industrial Development Bank of India Ltd. The new entity continued to its development finance role, while providing an array of wholesale and retail banking products (and does so till date). The following year, IDBI Bank acquired United Western Bank (which, at that time, had 230 branches spread over 47 districts, in 9 states). In the financial year of 2008, IDBI Bank had a net income of Rs 9415.9 crores and total assets of Rs 120,601 crores. The Present Today, IDBI Bank is counted amongst the leading public sector banks of India, apart from claiming the distinction of being the 4th largest bank, in overall ratings. It is presently regarded as the tenth largest development bank in the world, mainly in terms of reach. This is because of its wide network of 688 branches, 1139 ATMs and 457 centers. Apart from being involved in banking services, IDBI has set up institutions like The National Stock Exchange of India (NSE), The National Securities Depository Services Ltd. (NSDL) and the Stock Holding Corporation of India (SHCIL). Products Services Personal Banking Deposits Loans Payments Tax Payments, Stamp Duty Payments, Easy Fill, Bill Payment, Card to Card Money Transfer, PayMate, Online Payments Mutual Fund Demat Account IPO Insurance FamilyCare, Weathsurance Cards Debit Card, Credit Card, Cash Card, Gift Card, International Debit-cum-ATM Card, World Currency Card Institutional Banking Lockers India Post NRI Services Phone Banking SMS Banking Account Alerts Internet Banking Corporate Banking Project Finance Infrastructure Finance Syndication, Underwriting Advisory Services Carbon Credits Business Working Capital Cash Management Services Trade Finance Tax Payments Derivatives Technology Upgradation Fund Scheme (TUFS) Film Financing Scheme Direct Discounting Bills Rehabilitation Finance Others SME Finance Agri-business Products Main Functions of IDBI- IDBI coordinates between various financial institutions who are highly involved in provide financial assistance, promoting, and developing various industrial units IDBI is also engaged in a variety of promotional activities such as development programs for the fresh entrepreneurs, planning of consultancy services for both the small scale enterprises and the medium sized industrial units IDBI works for the advancement of technology and other welfare schemes to ensure economic development. Industrial Development Bank of India acts as a catalyst in various industrial development programs. IDBI provides financial assistance to all kinds of industrial units which comes under the provisions of the IDBI Act. IDBI has served various industrial sectors in India for about three years and has grown leaps and bounds in its size and operating units. IDBIs role as a catalyst IDBIs role as a catalyst to industrial development encompasses a wide spectrum of activities. IDBI can finance all types of industrial concerns covered under the provisions of the IDBI Act. With over three decades of service to the Indian industry, IDBI has grown substantially in terms of size of operations and portfolio. Developmental Activities of IDBI Promotional activities In fulfillment of its developmental role, the Bank continues to perform a wide range of promotional activities relating to developmental programmes for new entrepreneurs, consultancy services for small and medium enterprises and programmes designed for accredited voluntary agencies for the economic upliftment of the underprivileged. These include entrepreneurship development, self-employment and wage employment in the industrial sector for the weaker sections of society through voluntary agencies, support to Science and Technology Entrepreneurs Parks, Energy Conservation, Common Quality Testing Centres for small industries. Technical Consultancy Organizations With a view to making available at a reasonable cost, consultancy and advisory services to entrepreneurs, particularly to new and small entrepreneurs, IDBI, in collaboration with other All-India Financial Institutions, has set up a network of Technical Consultancy Organizations (TCOs) covering the entire country. TCOs offer diversified services to small and medium enterprises in the selection, formulation and appraisal of projects, their implementation and review. Entrepreneurship Development Institute Realising that entrepreneurship development is the key to industrial development, IDBI played a prime role in setting up of the Entrepreneurship Development Institute of India for fostering entrepreneurship in the country. It has also established similar institutes in Bihar, Orissa, Madhya Pradesh and Uttar Pradesh. IDBI also extends financial support to various organisations in conducting studies or surveys of relevance to industrial development. IDBI Lending Process, Institutional Structure, Training, Information and Data Needs IDBI was established in 1964 under an Act of Parliament for providing credit and other facilities for the development of industry. It also acts as the principal financial institution for coordinating the activities of institutions engaged in the finance, promotion, or development of industry. The Government of Indias shareholding in IDBI amounts to 72% and the rest of the shares are owned by the general public. IDBI has also offered specialised schemes for energy conservation viz. Equipment Finance for Energy Conservation and Energy Audit Subsidy Scheme. Presently, IDBI provides rupee and foreign currency term loans for the acquisition and installation of energy conservation equipment, and for pollution control and prevention projects in highly polluting industrial sectors, funded inter alia, out of World Banks Industrial Pollution Prevention Project (IPPP) or the US Agency for International Development-funded Greenhouse Gas Pollution Prevention (GEP) Project. Besides, finance is made available for EE/EM out of the on-going Industrial Energy Efficiency Project of the ADB of which the TA forms a part. Under this project, finance is given to industrial units in rupee as well as in foreign currency. Additional funding needs left unmet by the ADB funds are supplemented by IDBIs own funds as well. 3.1 IDBI Institutional Structure IDBI is governed by a Board of Directors and its operation is carried out under the supervision of the Chairman and Managing Director assisted by four Executive Directors and one Adviser. With its head office in Mumbai, IDBI has 43 additional offices throughout India. As of November 1998, IDBI was structured into 33 departments, which are organized into five groups to facilitate proper distribution of responsibility. Among these departments, the ones relevant to the efficient lending for ee/em activities are briefly described below. 3.1.1 Project appraisal department The Project Appraisal Department (PAD) appraises all the industrial project proposals. PAD projects constitute the majority of projects sanctioned by IDBI in terms of value. Besides a number of smaller projects are funded at the branch level. 3.1.2 Corporate finance departments The three Corporate Finance Departments (CFDs) follow up on the projects that have already been sanctioned, in order to ensure their timely implementation and proper utilization of funds. In addition, a new concept of a Relationship Manager was instituted within the CFDs. These managers will be dedicated to manage IDBIs interactions with a major industrial (ownership) group, such as Reliance Industries, the Tata Group, etc. While the relationship manager system works well from the perspective of consolidating knowledge about an industry group, it may not work as well where the focus has to be on an aspect of technology within an industry sector. For example, a relationship manager cannot be expected to be an expert on energy efficiency in every industry sector that forms a part of the industry group being dealt with by him/her. Hence, in order to develop some expertise in some of the industries, which are not necessarily dominated only by a few major industry groups, industry-sector-wise approach is also adopted. Thus the organization of a CFD is a workable mix of industry group and industry sub-sector, with the expertise of one Dealing group drawn upon by another. 3.1.3 Forex services and treasury departments: The Treasury and Funding Division contracts, decides on utilization and monitors all lines of credit from multi-lateral institutions like the World Bank (WB) and the Asian Development Bank (ADB). It manages the various specialized loans and grants for energy and environmental technology projects, including this TA project. Organizational Structure IDBIs organization structure is driven by its business objectives of offering the best services to the major industry groups. At the same time it is so organised to have industry specialists in important industrial sub-sectors as well. The organisational structure is geared to provide the best products and services in the present competitive environment while simultaneously attempting to meet its developmental role governed by â€Å"issue-based† lending. Following financial sector liberalisation, the environment has turned highly competitive compelling IDBI to organise itself in a manner to prioritise the objective of offering the best services to the major industry groups over focus exclusively for energy efficiency and environmental activities. There is a need to create a â€Å"home or center† for energy and environmental technical activities. This center needs to be located at the highest level within IDBI in order to ensure visibility, and to provide a resource base, which could be accessed by all the concerned departments described above. IEEP and other such lines of credit are being managed by the FSD, which is not directly engaged in either project appraisal or in implementation. Hence its role is one of being a facilitator and co-ordinator for giving the needed focus to the ee/em activities. It is quite possible for this Section to be upgraded to be the â€Å"home† suggested above with appropriate technical staff for policy making, facilitation of the lines of credit, developmental activities, etc. in ee/em issues. This will help clarify the varied roles of CFD and FSD and avoid duplication of effort, better coordination and communication between the FSD and the CFD. A system of built-in incentives for co-operation and co-ordination between the concerned departments will also aid the organisation in playing a more effective role in ee/em activities  relating to policy formulation, loan approvals and subsequent disbursement. 3.3 IDBI Lending Procedure The current procedure for lending at IDBI includes: (1) an inquiry stage, (2) an application stage, (3) site visits, (4) preparation of an appraisal note, (5) an evaluation by IDBI committee, (6) the issuance of a Letter of Intent, and (7) preparation of a legal agreement for lending for suitable projects. IDBI also operates special credit lines for the mitigation of pollution, implementation of the Montreal Protocol commitments, modernization and expansion of energy intensive industry, etc. The technical norms for these lines were determined individually, but the lending procedure is the same as that for other IDBI projects. The lending procedure followed by IDBI is comprehensive, based on accepted methods of evaluation and collective wisdom, and is transparent. The procedure, however, does not provide for a serious attempt to evaluate the energy and environmental components of any lending proposal. At each stage of the application for a loan, a company is required to provide information on energy consumption, along with that of other utility services. Energy consumption information is disaggregated into fuels and electricity categories. The company is not required to provide indicators of energy use to IDBI, which makes the information difficult to evaluate. Indicators could link the energy (fuel and electricity) consumption to physical activity levels and permit comparison with best practice in India and abroad. IDBI could also ask for additional information on technical indicators in the loan application that industries are required to complete. Conclusions and Recommendations Our evaluation of IDBIs institutional structure, lending procedures, and training and information needs revealed that there is a clear need for greater focus towards ee/em activities, by strengthening the existing institutional structure and capability in this area. This strengthening can be accomplished through the creation and establishment of a â€Å"resource center† that will provide the necessary technical backup for IDBI officers at all levels. The center resources will include access to technical experts, handbooks, and databases. The technical experts will assist in the organization of seminars, workshops, and training programs. Role of Financial Institutions in industrial development To accelerate the process of industrialization, immediately after independence, Government of India took appropriate steps to create a network of financial institutions to fill the gaps in the supply of long-term finance to industry. IFCI was the first institution which was set-up in 1948 followed by SFCs established by different States/Union Territories under the SFCs Act.1951. The NIDC (1954), ICICI (1955), NSIC (1955), and RCI (1958) were established. IDBI was established in 1964 as the apex institution in the field of industrial finance. UTI was also established in the same year. LIC came into existence in 1956 and GIC in 1972. SIDCs/SIICs strengthened institutional set-up at regional level. IRCI was set-up in 1971 which was later renamed as IRBI. Reserve Bank has played an important role in creation of all these institutions. Thus, structure of financial institutions in India has become so greatly diversified  and strengthened that it has the ability to supply finance to a variety of enterprises in diverse forms. In this , an attempt has been made to analyze the role of specialized financial institutions in meeting the term-requirements of our growing industrial sector. For this purpose, an effort has been made to ascertain the extent and rapidity of financial assistance granted by financial institutions to industrial sector in general and private sector in particular. Apart from analyzing purpose wise, industry wise and state wise assistance granted by financial institutions, special attention has been given to evaluate their role in removal of regional imbalances through provision of finance to projects located in identified backward areas of the country. In order to make an in depth study, three financial institutions of diverse nature namely, IDBI, ICICI and SFCs have been chosen which together provided about two-third of the total financial requirements of the industrial sector. During 1970-90 assistance sanctioned and disbursed by IDBI has increased at an annual average growth rate of 32.3 per cent and 27.7 per cent respectively, which were higher than the growth rate of sanctions and disbursements of all financial institutions. IDBI has granted 37.4 per cent of its total assistance by way of direct assistance and remaining 62.6 per cent indirectly through other financial institutions. Loans were major form of direct assistance with 88.7 per cent share, while refinance of industrial loans with 59.5 per cent share was the major form of indirect assistance. Private sector has been the largest beneficiary of IDBIs assistance followed by public, joint and cooperative sectors. IDBI has taken keen interest in granting finances to small scale sector which received 30 per cent of the total assistance sanctioned by IDBI. More than half of its assistance has gone to basic and capital goods industries while consumer goods and services have got a little more than one-third of total assistance of IDBI. It has paid equal attention to new and existing projects in its financing operations. Though IDBIs assistance is spread over all State and Union Territories, but its substantial proportion is concentrated among few relatively developed and large states. Similarly, a major part of its total assistance granted to projects located in identified backward areas, which formed about two-fifth of its total assistance, has gone to few developed and large states. In chapter five, the contribution of ICICI in meeting the financial requirements of the industrial sector has been analysed. During 1970-90 assistance sanctioned by ICICI increased at a rate of 26.5 per cent per annum while disbursements increased 23.1 per cent. In accordance with its objective, ICICI has sanctioned 35.7 per cent of its total assistance in the form of foreign currency assistance. Rupee loans constituted 37.5 per cent of total assistance sanctioned by ICICI. More than four-fifth of its total assistance has gone to private sector. ICICI has granted greater part of its assistance (61.7 per cent) to existing projects for their expansion, modernisation, etc. while new projects accounted for 38.3 per cent of total assistance. More than  two-third of ICICIs assistance has gone to non-traditional growth oriented industries like chemicals and chemical products, Iron and Steel, Machinery, etc. Assistance of ICICI is basically concentrated among few relatively developed state s despite some reduction during eighties. Over the years, ICICI has been granting an increasing proportion of its total assistance to backward areas of the country, but its major part has gone to backward areas of few developed  states. Household sector has contributed an increasing share in the total financial resources of ICICI, while governments share has declined. SFCs which are state level development banks set-up for financing small and medium scale industries in their respective states. Till about 1970, operations of all SFCs grew at a slow pace but during seventies there was rapid growth in their operations and the pace has been sustained during eighties also. During 1970-90 sanctions of SFCs increased at a rate of 20.5 per cent per annum while disbursements increased by a marginally higher rate of 21.2 per cent. Performance of different SFCs has varied from one another and from year to year. In accordance with their basic objective, 76.1 per cent of total assistance sanctioned and 91.4 per cent of the total number of units assisted by SFCs were in the small scale sector. Services have been the largest beneficiary of SFCs assistance followed by chemicals and chemical products, food products, textiles, etc. SFCs have, by and large, confined their assistance to new projects which accounted 84.4 per cent of total assistance. SFCs have granted more than half of their assistance to projects located in identified backward areas of their respective states. An important feature is that SFCs of relatively backward states have performed better in this regard than that of developed states. However, SFCs depend heavily on government sources for their financial requirements. The aggregative role of all financial institutions in the industrial development of the country. It clearly reveals that industrial concerns in India depend more on financial institutions to finance their ventures than raising funds directly from the capital market. Conclusions of this study have been given in the last chapter. Major findings of this study are summarised below: During the last twenty years assistance granted by financial institutions has increased at a significantly high rate leading industrial concerns to depend more and more on them. In terms of growth rate of sanctions, IDBI and ICICI have outstripped the average growth rate of sanctions of all financial institutions, but SFCs have fallen behind this trend. The gap between assistance sanctioned and disbursed is more pronounced in case of IDBI and ICICI but it is relatively narrower in case of SFCs. Private sector has been the largest beneficiary of assistance of financial institutions followed by public sector. Proportion of investment-savings gap filled up by financial institutions has increased in private and public sector both during eighties. Financial institutions have provided assistance to new as well as existing projects. However, SFCs have confined their financing operations basically to new projects. IDBI and ICICI have granted major part of their assistance to basic and capital goods industries but SFCs have paid greater attention on consumer goods industries. Statewise break-up of assistance provided by financial institutions reveals considerable concentration among few developed and large states despite some reduction during eighties. North-Eastern states have been almost completely neglected by all financial institutions. A significant part of the total assistance granted by financial institutions has gone to projects located in identified backward areas of the country, but its statewise distribution has helped to reduce intra-state disparities in industrial development and increased inter-state disparities between developed and backward states. Finally, IDBI and ICICI have generated a significant part of their resources from the household sector but SFCs are largely dependent upon the government sources. Role of Financial Institutions in Foreign Investment in India Financial Institutions plays a significant role in Foreign Investment in India. There are various financial institutions in India which undertake significant initiatives to ensure foreign investment inflows in the industrial units in India. The main role of the financial institutions in India in respect to foreign investments is to aid foreign investors in investment activities in India. The funds from overseas countries come in two forms: Foreign direct Investments and Joint Ventures of the foreign companies with Indian companies. Foreign direct investments inflows are approved through automatic route or through government route. Those units that require government approval to get funds require the FIPB approval. Foreign Direct Investment through automatic route, on the other hand, does not require FIPB approval. All these allocation of financial assistance to various industrial units in India are guided by the financial institutions set up in various parts of India. Some of the leading financial institutions in India that play an important role in foreign investments in India are RBI, IDBI Bank, IFCI Bank, ICICI Limited and EXIM Bank. RBI in Foreign Investment- RBI works through automatic route and government route in allocating funds in various sectors of the Indian industry. Its mandatory for all the foreign investors to get approvals from RBI in order to carry out invest activities in the industrial units in India. FDI is allotted up to 100 percent under automatic route and it does not require approval from FIPB. IDBI in Foreign Investment- IDBI acts as a financial institution which allots financial assistance to the industrial sectors which are mainly involved in manufacture or processing of goods, mining, transport generation and distribution of power both in private and public sectors. Industrial Development Bank of India (IDBI) has been a fully owned subsidiary bank of the Reserve Bank of India till February 1976 after which it was disconnected from RBI. ICICI Limited in Foreign Investment- ICICI Limited was set up in the year 1994 and ICICI Bank is a entirely owned subsidiary of ICICI Limited. ICICI Limited is known as one the best financial institutions in India as it offers a wide spectrum of services to its customers. ICICI bank offers a wide array of banking products and financial services to corporate and retail customers through various delivery channels, specialized subsidiaries and affiliated firms, venture capital units, non-life insurance sectors, and so on. EXIM Bank in Foreign Investment- EXIM Bank plays a pivotal role in providing financial assistance to encourage the export production in India. Direct financial assistance, Foreign investment finance, Term loaning options for export production and export development, Pre-shipping credit, Export bills rediscounting, and Refinance to commercial banks are some of the services that EXIM Bank has specialized in. Role of IDBI in Foreign Investment The role of IDBI in Foreign Investment is mainly to provide financial assistance on a consortium basis to various industrial units in India which are mainly involved in manufacturing or processing of goods, mining, transport generation and distribution of power. Industrial Development Bank of India (IDBI) has been a fully owned subsidiary bank of the Reserve Bank of India till February 1976. It was then disconnected from RBI and was made an autonomous corporation owned by the Government of India. IDBI is known to be the tenth largest bank in the world in terms of carrying out developmental activities. Some of the financial institutions set up by IDBI to carry out the activities are The National Stock Exchange (NSE), The National Securities Depository Services Ltd. (NSDL), and Stock Holding Corporation of India (SHCIL). Role of IDBI in Foreign Investment It manages various financial institutions working under IDBI bank Provides financial assistance to various industrial units in terms of developments It also offers refinancing options including term loans to the suitable financial institutions It provides funding to the industrial units that are involved in manufacture or processing of goods, mining, transport generation and distribution of power both in private and public sectors It also provides finance to various projects, expansion of any project, diversifications, or even developing the projects which will exceed Rs. 30 million and it also provides funding to those projects which cost less than Rs. 30 million through indirect means as it offers refinancing to the main financial institutions such as SFC/Commercial Banks etc OBJECTIVES OF IDBI IDBI is the apex institution in the area of long term industrial finance. It was established under the IDBI Act 1964 as a wholly owned subsidiary of RBI and started functioning on July 01, 1964. Under Public Financial Institutions Laws (Amendment) Act 1976, it was delinked from RBI. IDBI is engaged in direct financing of the industrial activities as well as in re-finance and re-discounting of bills against finance made available by commercial banks under their various schemes. The objectives of this institution are to create a principal institution for long term finance, to coordinate the institutions working in this field for planned development of industrial sector, to provide technical and administrative support to the industries and to conduct research and development activities for the benefit of industrial sector. It raises funds by way of market borrowing by way of bonds and deposits, borrowing from Govt. and RBI, borrowing abroad in foreign currency and lines of credit. Its functions include: direct loans (rupee as well as foreign currency) to industrial undertakings as defined in the Act to finance their new projects, expansion, modernisation etc. soft loans for various purposes including modernisation and under equipment finance scheme underwriting and direct subscription to shares/debentures of the industrial companies. sanction of foreign currency loans for import of equipment or capital goods. short term working capital loans to the corporates for meeting their working capital requirements. refinance to banks and other institutions against loans granted by them. Of late, with the reforms in the financial sector, IDBI has taken steps to re-shape its role from a development finance institution to a commercial institution. It has floated its own bank IDBI Bank as also a Mutual Fund. During the financial year 1999-2000 IDBIs total sanctions were Rs.28308 cr (19.2% increase), the total assets were Rs.72169 cr, net worth at Rs.9025 cr, capital adequacy ratio of 14.5%, DER 6.8:1 and PBT Rs.1027 cr (1301 cr previous years). To meet emerging challanges, it has been introducing new products, setting up Mergers Acquistions Divn, increasing fee based business such as corporate advisory services, credit syndication, debenture-trushtee ship etc., setting up of IT sector subsidiary-IDBI Intech Ltd, venture capital fund, joint ventures and transfer of not less than 51% of IDBIs share capital in SIDBI to PSBs as a result of SIDBI (Amendment) Act 2000 effective from 27.03.2000. IDBI scouting for buyouts, two banks on radar After acquiring United Western Bank three years ago, IDBI Bank is at it once again and has identified two domestic lenders as possible targets. Disclosing this, the public sector banks Chairman and Managing Director Yogesh Agarwal told reporters here today that talks were on with the two banks. He did not divulge the identities of the two banks. IDBIs move is in line with the central governments thinking favoring a consolidation in the Indian banking sector. IDBI does not need to raise funds for the acquisitions but may look at capital raising to finance its business growth. The bank has dropped its earlier plan to sell its Pune-based home loan subsidiary, IDBI Home Finance (IHFL). Review of Progress (Operations) IDBI has given special attention to better regional development and innovational and promotional activities. It has conducted surveys of backward regions. It has given special help to backward Industrial Development Bank of India (IDBA) Analysis Industrial Development Bank of India (IDBA) Analysis INTROUCTION The Industrial Development Bank of India Limited, was established as wholly-owned subsidiary of Reserve Bank of India. The foundation of bank was laid down under an Act of Parliament, in July 1964. The main aim behind the setting up of IDBI was to provide credit and other facilities for the Indian industry, which was still in the initial stages of growth and development. In February 1976, the ownership of IDBI was transferred to Government of India. After the transfer of its ownership, IDBI became the main institution, through which the institutes engaged in financing, promoting and developing industry were to be coordinated. In January 1992, IDBI accessed domestic retail debt market for the first time, with innovative Deep Discount Bonds, and registered path-breaking success. The following year, it set up the IDBI Capital Market Services Ltd., as its wholly-owned subsidiary, to offer a broad range of financial services, including Bond Trading, Equity Broking, Client Asset Management and Depository Services. In September 1994, in response to RBIs policy of opening up domestic banking sector to private participation, IDBI set up IDBI Bank Ltd., in association with SIDBI. In July 1995, public issue of the bank was taken out, after which the Governments shareholding came down (though it still retains majority of the shareholding in the bank). In September 2003, IDBI took over Tata Home Finance Ltd, renamed ‘IDBI Home finance Limited, thus diversifying its business domain and entering the arena of retail finance sector. The year 2005 witnessed the merger of IDBI Bank with the Industrial Development Bank of India Ltd. The new entity continued to its development finance role, while providing an array of wholesale and retail banking products (and does so till date). The following year, IDBI Bank acquired United Western Bank (which, at that time, had 230 branches spread over 47 districts, in 9 states). In the financial year of 2008, IDBI Bank had a net income of Rs 9415.9 crores and total assets of Rs 120,601 crores. The Present Today, IDBI Bank is counted amongst the leading public sector banks of India, apart from claiming the distinction of being the 4th largest bank, in overall ratings. It is presently regarded as the tenth largest development bank in the world, mainly in terms of reach. This is because of its wide network of 688 branches, 1139 ATMs and 457 centers. Apart from being involved in banking services, IDBI has set up institutions like The National Stock Exchange of India (NSE), The National Securities Depository Services Ltd. (NSDL) and the Stock Holding Corporation of India (SHCIL). Products Services Personal Banking Deposits Loans Payments Tax Payments, Stamp Duty Payments, Easy Fill, Bill Payment, Card to Card Money Transfer, PayMate, Online Payments Mutual Fund Demat Account IPO Insurance FamilyCare, Weathsurance Cards Debit Card, Credit Card, Cash Card, Gift Card, International Debit-cum-ATM Card, World Currency Card Institutional Banking Lockers India Post NRI Services Phone Banking SMS Banking Account Alerts Internet Banking Corporate Banking Project Finance Infrastructure Finance Syndication, Underwriting Advisory Services Carbon Credits Business Working Capital Cash Management Services Trade Finance Tax Payments Derivatives Technology Upgradation Fund Scheme (TUFS) Film Financing Scheme Direct Discounting Bills Rehabilitation Finance Others SME Finance Agri-business Products Main Functions of IDBI- IDBI coordinates between various financial institutions who are highly involved in provide financial assistance, promoting, and developing various industrial units IDBI is also engaged in a variety of promotional activities such as development programs for the fresh entrepreneurs, planning of consultancy services for both the small scale enterprises and the medium sized industrial units IDBI works for the advancement of technology and other welfare schemes to ensure economic development. Industrial Development Bank of India acts as a catalyst in various industrial development programs. IDBI provides financial assistance to all kinds of industrial units which comes under the provisions of the IDBI Act. IDBI has served various industrial sectors in India for about three years and has grown leaps and bounds in its size and operating units. IDBIs role as a catalyst IDBIs role as a catalyst to industrial development encompasses a wide spectrum of activities. IDBI can finance all types of industrial concerns covered under the provisions of the IDBI Act. With over three decades of service to the Indian industry, IDBI has grown substantially in terms of size of operations and portfolio. Developmental Activities of IDBI Promotional activities In fulfillment of its developmental role, the Bank continues to perform a wide range of promotional activities relating to developmental programmes for new entrepreneurs, consultancy services for small and medium enterprises and programmes designed for accredited voluntary agencies for the economic upliftment of the underprivileged. These include entrepreneurship development, self-employment and wage employment in the industrial sector for the weaker sections of society through voluntary agencies, support to Science and Technology Entrepreneurs Parks, Energy Conservation, Common Quality Testing Centres for small industries. Technical Consultancy Organizations With a view to making available at a reasonable cost, consultancy and advisory services to entrepreneurs, particularly to new and small entrepreneurs, IDBI, in collaboration with other All-India Financial Institutions, has set up a network of Technical Consultancy Organizations (TCOs) covering the entire country. TCOs offer diversified services to small and medium enterprises in the selection, formulation and appraisal of projects, their implementation and review. Entrepreneurship Development Institute Realising that entrepreneurship development is the key to industrial development, IDBI played a prime role in setting up of the Entrepreneurship Development Institute of India for fostering entrepreneurship in the country. It has also established similar institutes in Bihar, Orissa, Madhya Pradesh and Uttar Pradesh. IDBI also extends financial support to various organisations in conducting studies or surveys of relevance to industrial development. IDBI Lending Process, Institutional Structure, Training, Information and Data Needs IDBI was established in 1964 under an Act of Parliament for providing credit and other facilities for the development of industry. It also acts as the principal financial institution for coordinating the activities of institutions engaged in the finance, promotion, or development of industry. The Government of Indias shareholding in IDBI amounts to 72% and the rest of the shares are owned by the general public. IDBI has also offered specialised schemes for energy conservation viz. Equipment Finance for Energy Conservation and Energy Audit Subsidy Scheme. Presently, IDBI provides rupee and foreign currency term loans for the acquisition and installation of energy conservation equipment, and for pollution control and prevention projects in highly polluting industrial sectors, funded inter alia, out of World Banks Industrial Pollution Prevention Project (IPPP) or the US Agency for International Development-funded Greenhouse Gas Pollution Prevention (GEP) Project. Besides, finance is made available for EE/EM out of the on-going Industrial Energy Efficiency Project of the ADB of which the TA forms a part. Under this project, finance is given to industrial units in rupee as well as in foreign currency. Additional funding needs left unmet by the ADB funds are supplemented by IDBIs own funds as well. 3.1 IDBI Institutional Structure IDBI is governed by a Board of Directors and its operation is carried out under the supervision of the Chairman and Managing Director assisted by four Executive Directors and one Adviser. With its head office in Mumbai, IDBI has 43 additional offices throughout India. As of November 1998, IDBI was structured into 33 departments, which are organized into five groups to facilitate proper distribution of responsibility. Among these departments, the ones relevant to the efficient lending for ee/em activities are briefly described below. 3.1.1 Project appraisal department The Project Appraisal Department (PAD) appraises all the industrial project proposals. PAD projects constitute the majority of projects sanctioned by IDBI in terms of value. Besides a number of smaller projects are funded at the branch level. 3.1.2 Corporate finance departments The three Corporate Finance Departments (CFDs) follow up on the projects that have already been sanctioned, in order to ensure their timely implementation and proper utilization of funds. In addition, a new concept of a Relationship Manager was instituted within the CFDs. These managers will be dedicated to manage IDBIs interactions with a major industrial (ownership) group, such as Reliance Industries, the Tata Group, etc. While the relationship manager system works well from the perspective of consolidating knowledge about an industry group, it may not work as well where the focus has to be on an aspect of technology within an industry sector. For example, a relationship manager cannot be expected to be an expert on energy efficiency in every industry sector that forms a part of the industry group being dealt with by him/her. Hence, in order to develop some expertise in some of the industries, which are not necessarily dominated only by a few major industry groups, industry-sector-wise approach is also adopted. Thus the organization of a CFD is a workable mix of industry group and industry sub-sector, with the expertise of one Dealing group drawn upon by another. 3.1.3 Forex services and treasury departments: The Treasury and Funding Division contracts, decides on utilization and monitors all lines of credit from multi-lateral institutions like the World Bank (WB) and the Asian Development Bank (ADB). It manages the various specialized loans and grants for energy and environmental technology projects, including this TA project. Organizational Structure IDBIs organization structure is driven by its business objectives of offering the best services to the major industry groups. At the same time it is so organised to have industry specialists in important industrial sub-sectors as well. The organisational structure is geared to provide the best products and services in the present competitive environment while simultaneously attempting to meet its developmental role governed by â€Å"issue-based† lending. Following financial sector liberalisation, the environment has turned highly competitive compelling IDBI to organise itself in a manner to prioritise the objective of offering the best services to the major industry groups over focus exclusively for energy efficiency and environmental activities. There is a need to create a â€Å"home or center† for energy and environmental technical activities. This center needs to be located at the highest level within IDBI in order to ensure visibility, and to provide a resource base, which could be accessed by all the concerned departments described above. IEEP and other such lines of credit are being managed by the FSD, which is not directly engaged in either project appraisal or in implementation. Hence its role is one of being a facilitator and co-ordinator for giving the needed focus to the ee/em activities. It is quite possible for this Section to be upgraded to be the â€Å"home† suggested above with appropriate technical staff for policy making, facilitation of the lines of credit, developmental activities, etc. in ee/em issues. This will help clarify the varied roles of CFD and FSD and avoid duplication of effort, better coordination and communication between the FSD and the CFD. A system of built-in incentives for co-operation and co-ordination between the concerned departments will also aid the organisation in playing a more effective role in ee/em activities  relating to policy formulation, loan approvals and subsequent disbursement. 3.3 IDBI Lending Procedure The current procedure for lending at IDBI includes: (1) an inquiry stage, (2) an application stage, (3) site visits, (4) preparation of an appraisal note, (5) an evaluation by IDBI committee, (6) the issuance of a Letter of Intent, and (7) preparation of a legal agreement for lending for suitable projects. IDBI also operates special credit lines for the mitigation of pollution, implementation of the Montreal Protocol commitments, modernization and expansion of energy intensive industry, etc. The technical norms for these lines were determined individually, but the lending procedure is the same as that for other IDBI projects. The lending procedure followed by IDBI is comprehensive, based on accepted methods of evaluation and collective wisdom, and is transparent. The procedure, however, does not provide for a serious attempt to evaluate the energy and environmental components of any lending proposal. At each stage of the application for a loan, a company is required to provide information on energy consumption, along with that of other utility services. Energy consumption information is disaggregated into fuels and electricity categories. The company is not required to provide indicators of energy use to IDBI, which makes the information difficult to evaluate. Indicators could link the energy (fuel and electricity) consumption to physical activity levels and permit comparison with best practice in India and abroad. IDBI could also ask for additional information on technical indicators in the loan application that industries are required to complete. Conclusions and Recommendations Our evaluation of IDBIs institutional structure, lending procedures, and training and information needs revealed that there is a clear need for greater focus towards ee/em activities, by strengthening the existing institutional structure and capability in this area. This strengthening can be accomplished through the creation and establishment of a â€Å"resource center† that will provide the necessary technical backup for IDBI officers at all levels. The center resources will include access to technical experts, handbooks, and databases. The technical experts will assist in the organization of seminars, workshops, and training programs. Role of Financial Institutions in industrial development To accelerate the process of industrialization, immediately after independence, Government of India took appropriate steps to create a network of financial institutions to fill the gaps in the supply of long-term finance to industry. IFCI was the first institution which was set-up in 1948 followed by SFCs established by different States/Union Territories under the SFCs Act.1951. The NIDC (1954), ICICI (1955), NSIC (1955), and RCI (1958) were established. IDBI was established in 1964 as the apex institution in the field of industrial finance. UTI was also established in the same year. LIC came into existence in 1956 and GIC in 1972. SIDCs/SIICs strengthened institutional set-up at regional level. IRCI was set-up in 1971 which was later renamed as IRBI. Reserve Bank has played an important role in creation of all these institutions. Thus, structure of financial institutions in India has become so greatly diversified  and strengthened that it has the ability to supply finance to a variety of enterprises in diverse forms. In this , an attempt has been made to analyze the role of specialized financial institutions in meeting the term-requirements of our growing industrial sector. For this purpose, an effort has been made to ascertain the extent and rapidity of financial assistance granted by financial institutions to industrial sector in general and private sector in particular. Apart from analyzing purpose wise, industry wise and state wise assistance granted by financial institutions, special attention has been given to evaluate their role in removal of regional imbalances through provision of finance to projects located in identified backward areas of the country. In order to make an in depth study, three financial institutions of diverse nature namely, IDBI, ICICI and SFCs have been chosen which together provided about two-third of the total financial requirements of the industrial sector. During 1970-90 assistance sanctioned and disbursed by IDBI has increased at an annual average growth rate of 32.3 per cent and 27.7 per cent respectively, which were higher than the growth rate of sanctions and disbursements of all financial institutions. IDBI has granted 37.4 per cent of its total assistance by way of direct assistance and remaining 62.6 per cent indirectly through other financial institutions. Loans were major form of direct assistance with 88.7 per cent share, while refinance of industrial loans with 59.5 per cent share was the major form of indirect assistance. Private sector has been the largest beneficiary of IDBIs assistance followed by public, joint and cooperative sectors. IDBI has taken keen interest in granting finances to small scale sector which received 30 per cent of the total assistance sanctioned by IDBI. More than half of its assistance has gone to basic and capital goods industries while consumer goods and services have got a little more than one-third of total assistance of IDBI. It has paid equal attention to new and existing projects in its financing operations. Though IDBIs assistance is spread over all State and Union Territories, but its substantial proportion is concentrated among few relatively developed and large states. Similarly, a major part of its total assistance granted to projects located in identified backward areas, which formed about two-fifth of its total assistance, has gone to few developed and large states. In chapter five, the contribution of ICICI in meeting the financial requirements of the industrial sector has been analysed. During 1970-90 assistance sanctioned by ICICI increased at a rate of 26.5 per cent per annum while disbursements increased 23.1 per cent. In accordance with its objective, ICICI has sanctioned 35.7 per cent of its total assistance in the form of foreign currency assistance. Rupee loans constituted 37.5 per cent of total assistance sanctioned by ICICI. More than four-fifth of its total assistance has gone to private sector. ICICI has granted greater part of its assistance (61.7 per cent) to existing projects for their expansion, modernisation, etc. while new projects accounted for 38.3 per cent of total assistance. More than  two-third of ICICIs assistance has gone to non-traditional growth oriented industries like chemicals and chemical products, Iron and Steel, Machinery, etc. Assistance of ICICI is basically concentrated among few relatively developed state s despite some reduction during eighties. Over the years, ICICI has been granting an increasing proportion of its total assistance to backward areas of the country, but its major part has gone to backward areas of few developed  states. Household sector has contributed an increasing share in the total financial resources of ICICI, while governments share has declined. SFCs which are state level development banks set-up for financing small and medium scale industries in their respective states. Till about 1970, operations of all SFCs grew at a slow pace but during seventies there was rapid growth in their operations and the pace has been sustained during eighties also. During 1970-90 sanctions of SFCs increased at a rate of 20.5 per cent per annum while disbursements increased by a marginally higher rate of 21.2 per cent. Performance of different SFCs has varied from one another and from year to year. In accordance with their basic objective, 76.1 per cent of total assistance sanctioned and 91.4 per cent of the total number of units assisted by SFCs were in the small scale sector. Services have been the largest beneficiary of SFCs assistance followed by chemicals and chemical products, food products, textiles, etc. SFCs have, by and large, confined their assistance to new projects which accounted 84.4 per cent of total assistance. SFCs have granted more than half of their assistance to projects located in identified backward areas of their respective states. An important feature is that SFCs of relatively backward states have performed better in this regard than that of developed states. However, SFCs depend heavily on government sources for their financial requirements. The aggregative role of all financial institutions in the industrial development of the country. It clearly reveals that industrial concerns in India depend more on financial institutions to finance their ventures than raising funds directly from the capital market. Conclusions of this study have been given in the last chapter. Major findings of this study are summarised below: During the last twenty years assistance granted by financial institutions has increased at a significantly high rate leading industrial concerns to depend more and more on them. In terms of growth rate of sanctions, IDBI and ICICI have outstripped the average growth rate of sanctions of all financial institutions, but SFCs have fallen behind this trend. The gap between assistance sanctioned and disbursed is more pronounced in case of IDBI and ICICI but it is relatively narrower in case of SFCs. Private sector has been the largest beneficiary of assistance of financial institutions followed by public sector. Proportion of investment-savings gap filled up by financial institutions has increased in private and public sector both during eighties. Financial institutions have provided assistance to new as well as existing projects. However, SFCs have confined their financing operations basically to new projects. IDBI and ICICI have granted major part of their assistance to basic and capital goods industries but SFCs have paid greater attention on consumer goods industries. Statewise break-up of assistance provided by financial institutions reveals considerable concentration among few developed and large states despite some reduction during eighties. North-Eastern states have been almost completely neglected by all financial institutions. A significant part of the total assistance granted by financial institutions has gone to projects located in identified backward areas of the country, but its statewise distribution has helped to reduce intra-state disparities in industrial development and increased inter-state disparities between developed and backward states. Finally, IDBI and ICICI have generated a significant part of their resources from the household sector but SFCs are largely dependent upon the government sources. Role of Financial Institutions in Foreign Investment in India Financial Institutions plays a significant role in Foreign Investment in India. There are various financial institutions in India which undertake significant initiatives to ensure foreign investment inflows in the industrial units in India. The main role of the financial institutions in India in respect to foreign investments is to aid foreign investors in investment activities in India. The funds from overseas countries come in two forms: Foreign direct Investments and Joint Ventures of the foreign companies with Indian companies. Foreign direct investments inflows are approved through automatic route or through government route. Those units that require government approval to get funds require the FIPB approval. Foreign Direct Investment through automatic route, on the other hand, does not require FIPB approval. All these allocation of financial assistance to various industrial units in India are guided by the financial institutions set up in various parts of India. Some of the leading financial institutions in India that play an important role in foreign investments in India are RBI, IDBI Bank, IFCI Bank, ICICI Limited and EXIM Bank. RBI in Foreign Investment- RBI works through automatic route and government route in allocating funds in various sectors of the Indian industry. Its mandatory for all the foreign investors to get approvals from RBI in order to carry out invest activities in the industrial units in India. FDI is allotted up to 100 percent under automatic route and it does not require approval from FIPB. IDBI in Foreign Investment- IDBI acts as a financial institution which allots financial assistance to the industrial sectors which are mainly involved in manufacture or processing of goods, mining, transport generation and distribution of power both in private and public sectors. Industrial Development Bank of India (IDBI) has been a fully owned subsidiary bank of the Reserve Bank of India till February 1976 after which it was disconnected from RBI. ICICI Limited in Foreign Investment- ICICI Limited was set up in the year 1994 and ICICI Bank is a entirely owned subsidiary of ICICI Limited. ICICI Limited is known as one the best financial institutions in India as it offers a wide spectrum of services to its customers. ICICI bank offers a wide array of banking products and financial services to corporate and retail customers through various delivery channels, specialized subsidiaries and affiliated firms, venture capital units, non-life insurance sectors, and so on. EXIM Bank in Foreign Investment- EXIM Bank plays a pivotal role in providing financial assistance to encourage the export production in India. Direct financial assistance, Foreign investment finance, Term loaning options for export production and export development, Pre-shipping credit, Export bills rediscounting, and Refinance to commercial banks are some of the services that EXIM Bank has specialized in. Role of IDBI in Foreign Investment The role of IDBI in Foreign Investment is mainly to provide financial assistance on a consortium basis to various industrial units in India which are mainly involved in manufacturing or processing of goods, mining, transport generation and distribution of power. Industrial Development Bank of India (IDBI) has been a fully owned subsidiary bank of the Reserve Bank of India till February 1976. It was then disconnected from RBI and was made an autonomous corporation owned by the Government of India. IDBI is known to be the tenth largest bank in the world in terms of carrying out developmental activities. Some of the financial institutions set up by IDBI to carry out the activities are The National Stock Exchange (NSE), The National Securities Depository Services Ltd. (NSDL), and Stock Holding Corporation of India (SHCIL). Role of IDBI in Foreign Investment It manages various financial institutions working under IDBI bank Provides financial assistance to various industrial units in terms of developments It also offers refinancing options including term loans to the suitable financial institutions It provides funding to the industrial units that are involved in manufacture or processing of goods, mining, transport generation and distribution of power both in private and public sectors It also provides finance to various projects, expansion of any project, diversifications, or even developing the projects which will exceed Rs. 30 million and it also provides funding to those projects which cost less than Rs. 30 million through indirect means as it offers refinancing to the main financial institutions such as SFC/Commercial Banks etc OBJECTIVES OF IDBI IDBI is the apex institution in the area of long term industrial finance. It was established under the IDBI Act 1964 as a wholly owned subsidiary of RBI and started functioning on July 01, 1964. Under Public Financial Institutions Laws (Amendment) Act 1976, it was delinked from RBI. IDBI is engaged in direct financing of the industrial activities as well as in re-finance and re-discounting of bills against finance made available by commercial banks under their various schemes. The objectives of this institution are to create a principal institution for long term finance, to coordinate the institutions working in this field for planned development of industrial sector, to provide technical and administrative support to the industries and to conduct research and development activities for the benefit of industrial sector. It raises funds by way of market borrowing by way of bonds and deposits, borrowing from Govt. and RBI, borrowing abroad in foreign currency and lines of credit. Its functions include: direct loans (rupee as well as foreign currency) to industrial undertakings as defined in the Act to finance their new projects, expansion, modernisation etc. soft loans for various purposes including modernisation and under equipment finance scheme underwriting and direct subscription to shares/debentures of the industrial companies. sanction of foreign currency loans for import of equipment or capital goods. short term working capital loans to the corporates for meeting their working capital requirements. refinance to banks and other institutions against loans granted by them. Of late, with the reforms in the financial sector, IDBI has taken steps to re-shape its role from a development finance institution to a commercial institution. It has floated its own bank IDBI Bank as also a Mutual Fund. During the financial year 1999-2000 IDBIs total sanctions were Rs.28308 cr (19.2% increase), the total assets were Rs.72169 cr, net worth at Rs.9025 cr, capital adequacy ratio of 14.5%, DER 6.8:1 and PBT Rs.1027 cr (1301 cr previous years). To meet emerging challanges, it has been introducing new products, setting up Mergers Acquistions Divn, increasing fee based business such as corporate advisory services, credit syndication, debenture-trushtee ship etc., setting up of IT sector subsidiary-IDBI Intech Ltd, venture capital fund, joint ventures and transfer of not less than 51% of IDBIs share capital in SIDBI to PSBs as a result of SIDBI (Amendment) Act 2000 effective from 27.03.2000. IDBI scouting for buyouts, two banks on radar After acquiring United Western Bank three years ago, IDBI Bank is at it once again and has identified two domestic lenders as possible targets. Disclosing this, the public sector banks Chairman and Managing Director Yogesh Agarwal told reporters here today that talks were on with the two banks. He did not divulge the identities of the two banks. IDBIs move is in line with the central governments thinking favoring a consolidation in the Indian banking sector. IDBI does not need to raise funds for the acquisitions but may look at capital raising to finance its business growth. The bank has dropped its earlier plan to sell its Pune-based home loan subsidiary, IDBI Home Finance (IHFL). Review of Progress (Operations) IDBI has given special attention to better regional development and innovational and promotional activities. It has conducted surveys of backward regions. It has given special help to backward