Development Banks

  • The Union Finance Minister recently (budget speech 2019-20) announced the setting up of a development bank.
  • Development banks are financial institutions that provide long-term credit.
  • They are also known as long term-lending institutions or development finance institutions.
  • They generally support capital-intensive investments spread over a long period and yielding low rates of return. For e.g. urban infrastructure, mining and heavy industry, irrigation systems
  • Such banks often lend at low and stable rates of interest to promote long-term investments with considerable social benefits.
  • Few examples include, Industrial Finance Corporation of India (IFCI), State Finance Corporations (SFCs), Industrial Development Bank of India (IDBI), Unit Trust of India ....
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