Discussion
The main functions of IFCI are -
(i) Granting loans and advances for the establishment, expansion diversification and modernisation of industries in
corporate and co-operative sectors.
(ii) Guaranteeing loans raised by industrial concerns in the capital market, both in rupees and foreign currencies.
(iii) Subscribing or underwriting the issue of shares and debentures by industries. Such investment can be held up to 7 years.
(iv) Guaranteeing credit purchase of capital goods imported as well as purchased within the country
Answer: D
Correct answer: (i), (ii), (iii) and (iv)
All four are IFCI functions. As India's first development finance institution, established in 1948, its mandate was deliberately broad.
It grants loans for establishment, expansion, diversification and modernisation in the corporate and co-operative sectors; guarantees loans raised in the capital market in rupees or foreign currency; subscribes to or underwrites issues of shares and debentures, holding such investment up to seven years; and guarantees deferred payments for capital goods bought at home or imported. Note the pattern: two lending powers and two guarantee powers, the guarantees letting IFCI support a concern without committing its own funds.
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