Role of banking in industrial development.

1. 6.53

2. TABLE OF CONTENTS
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1. What is bank?
2. Evolution of banking in India
3. What is industrial development?
4. Role of industrial development in improving economy.
5. History of industrial development in India
6. Industrial policy, 1991
7. Significance of banking in industrial development
8. Influence of banks on industries
9. Types of industries and their banking requirements
10. Role of banking in different types of industries.
11. Impact of banks on economy and industrial area of the country

3. 3
• A bank is a financial institution
that accepts deposits from the
public and creates a demand
deposit while simultaneously
making loans. Lending activities
can be directly performed by the
bank or indirectly through
capital markets.

4. • The evolution of the banking system in India continued pretty
much the same as after independence.
• In 1969, the Government of India decided to nationalize the
banks under the Banking Regulation Act, 1949.
• A total of 14 banks were nationalized, including the Reserve
Bank of India (RBI).
• There were three phases of evolution in Indian Banking
System - Phase 1: The Pre-Independence Phase, The Post-
Independence Phase, Phase 3: The LPG Era (1991- Till Date)

5. • Industrial development means any development involving the use of
premises (land and buildings) for manufacturing, processing, bulk
storage, warehousing, servicing and repair activities, or if the use of
premises is unknown, any development permitted or authorized by
resource consent in an industrial zone.
• Many industries have been established in the post-independence
India in private, public and joint sectors. About 10 per cent of the total
workers are employed in the organized industrial sector.

6. CONTRIBUTION OF INDUSTRIAL
DEVELOPMENT IN IMPROVING
ECONOMY
• Industrial Development = Modernization
• Industrial Development leads to Urbanization.
• Industrial Development of one industry leads to growth in
others.
• Industrial Development reduces unemployment and
poverty.
• Industrial Development leads to higher standard of living.

7. Indian Industrialization under
British Rule. After 1850 new
phase of India started because
a large-scale private industry of
jute, cotton, and silk
established. The first jute
industry started at Hooghly
Valley at Kolkata in 1854. To
transport the goods easily from
one place to another Railway
started in India.
The industrial revolution entered
India in 1854 when Bombay
opened its first steam-powered
cotton mill in Asia. Initially, the
growth was slow, and the
expansion of these modernised
cotton mills was not done until
the 1870s and 1880s. India now
has the world's sixth-largest
economy

8. 8
• Encourage business and capital
formation
• Boost saving practices of citizens
• Smoothing of trade and commerce
functions
• Using monetary policy
• Generate employment opportunity
• Balanced development
• Support agriculture development

9. INDUSTRIAL POLICY, 1991
The New Industrial Policy of 1991 comes at the center of
economic reforms that launched during the early 1990s. All the
later reform measures were derived out of the new industrial
policy. The Policy has brought comprehensive changes in
economic regulation in the country. As the name suggests, these
reform measures were made in different areas related to the
industrial sector. As part of the policy, the role of public sector has
been redefined. A dedicated reform policy for the public sector
including the disinvestment programme were launched under the
NIP 1991. Private sector has given welcome in major industries
that were previously reserved for the public sector.

10. OBJECTIVES AND OUTCOMES OF IPC, 1991
OBJECTIVES
a. To provide incentives for setting industries in the
backward areas.
b. To reduce the inflation rate and remove the imbalances
in payment.
c. To reduce the losses of public sector enterprises and
make them profitable.
d. The policy aimed to permit the international flow of goods
services capital technology and human resources with
fewer restrictions.
e. It wanted to increase the share of the private sector in
the economy, and hence the number of reserved
industries was reduced.
OUTCOMES
a. The policy liberalized the economy by removing the
bureaucratic red-tapism and other impediments to
industrial growth. It ended the policy of license,
permit, and quota raj.
b. The role of public sector industries in the economy
was reduced which reduced the burden on the
government. The government used the policy of
disinvestment in the public sector enterprises facing
financial losses.
c. The special initiatives such as the Special Economic
Zones (SEZ), Export Processing Zones (EPZ),
Export Oriented Units (EOU), etc taken under the
new economic policy 1991 increased the exports
from India. It also helped to increase the Foreign
Exchange Reserves of India

11. INFLUENCE OF BANKS ON
INDUSTRIES
The banking sector is an industry and a section of the economy
devoted to the holding of financial assets for others and investing
those financial assets as a leveraged way to create more wealth.
The sector also includes the regulation of banking activities by
government agencies, insurance, mortgages, investor services,
and credit cards.
• Using Assets as Leverage
• Regulation of Banking Activities
• Popular Companies in the Banking Sector

12. TYPES OF INDUSTRIES
1 2 3
The secondary industry
majorly includes those industries
which are involved in
construction and manufacturing.
The tertiary industry majorly
consists of the service sector.
Primary Industry
The primary industry includes the
economy that utilises the natural
resources of the environment like
forestry, agriculture, fishing, and
mining.
Secondary Industry Tertiary Industry

13. ROLE OF BANKING IN
DIFFERENT
INDUSTRIES
13
• Every business is classified into different
industries based on the products they make
and the markets they cater to. These
industries are classified on their specialties
which are based on goods and services they
provide.
a) TELECOMMINUCATION INDUSTRY
b) LOGISTICS & TRANSPORT INDUSTRY
c) PHARMACEUTICAL, HEALTHCARE &
HOSPITALITY INDUSTRY
d) EDUCATION INDUSTRY
e) CONSTRUCTION INDUSTRY

14. TELECOMMUNICATION
INDUSTRY
• In the past twenty years technological advances and regulatory
changes have not only altered the telecommunications
industries but have also brought the all industries closer
together.
• Many banking institutions now provide telecommunications
services, while some telecommunications companies provide
financial services.

15. TRANSPORT
INDUSTRY
15
• The traditional model reveals that
the commercial banking sector's
involvement in transport sector
financing has been almost
exclusively limited but over the
period it has changed.

16. PHARMACEUTICAL,
HEALTHCARE &
HOSPITALITY INDUSTRY
• Within less than a decade the World Bank has
become the largest single source of finance
(loans) for health in low- and middle-income
countries as well as a major player in the field
of pharmaceuticals
• However, pharmaceuticals are frequently being
used irrationally, mainly due to market
imperfections in healthcare and hospitality
industry.

17. EDUCATION
INDUSTRY
• Education is the most powerful weapon
which can be used to change the world
and to remove the darkness from the
world.
• Banks are expending every year some
amount for educating the people, if the
people will be educated the nation will be
developed.

18. CONSTRUCTION INDUSTRY
• The commercial banks form an important
source by which many investors get funds to
finance building and other real property
projects.
• The major issue in building, real estate
development and investment is finance. There
is no iota of doubt that funding is an important
factor in real estate development and building
projects

19. AGRICULTURE
INDUSTRY
19
• In a changing environment, banks are
diversifying their role in the agriculture
sector in order to get revenue from their
significant contribution to agriculture.
• Few facilities and initiatives by government
with back up of various banks created for
farmers in terms of agriculture are
Insurance, Training and Consultancy,
Warehousing by Banks, Agri-Clinics, etc.

20. EXAMPLES OF SUCH BANKS

21. INDUSTRIAL DEVELOPMENT
BANK OF INDIA
•The Industrial Development Bank of India (IDBI) was
established in 1964 under an Act of Parliament as a wholly-
owned subsidiary of the RBI. In 1976, the ownership of IDBI
was transferred to the government of india and it was made the
principal financial institution for coordinating the activities of
institutions engaged in financing, promoting, and developing
industry in India.

22. SMALL INDUSTRIES
DEVELOPMENT OF INDIA
22
• To promote small-scale industries in the
country, a special Act was passed in
Parliament in April 1990 for starting of
the Small Industries Development Bank
of India. SIDBI has an authorized capital
of Rs. 1000 crores which can be
increased to Rs. 1000 crores.

23. INDUSTRIAL CREDIT AND
INVESMENT CORPORATION OF
INDIA
• ICICI acronym stands for Industrial Credit and
Investment Corporation of India.
• The creation of ICICI in 1955 was a milestone in the
Indian capital market segment.
• The principal objective was to create a development
financial institution for providing medium-term and long-
term project financing to Indian businesses.

24. INDUSTRIAL FINANCE
CORPORATION OF INDIA
24
• It is the first financial institute
the government established after
independence.
• The main aim of the incorporation
of IFCI was to provide long-term
finance to the manufacturing and
industrial sector of the country.

25. INDUSTRIAL RECONSTRUCTION
BANK OF INDIA
• IRBI was established in March 1985 to take over IRCI.
• Now IRBI must function as the principal all-India credit
reconstruction agency for industrial revival, assisting and
promoting industrial development, and rehabilitating
industrial concerns.
• It has also to co-ordinate with similar institutions.
• IRBI provides term loans and working capital finance to
medium, large, tiny sector units.

26. Banks purchasing shares
for small industries
Banks also give managerial
advice to such newly
formed industries
Banks giving loans to
industries at suitable rates
of interest
Some banks over the country
invest in small-scale industries
by often purchasing shares of
various industries to boost their
market values.
ADDITIONAL FUNCTIONS OF BANKING THAT
IMPACTS ON INDUSTRIAL DEVELOPMENT
Banks have a subdivision in
which they advise newly formed
industries about to manage their
newly formed companies and
how the management should go
on.
One can take a business loan to
start a new project, expand the
current business to a new
location, buy new equipment, or
purchase office space and
assets.

27. Industries shifting to
emerging trends in banking
E-commerce backing up
industrial development
Issues and drawbacks
faced by industries before
globalization
Over the period many changes can
be seen in working of both the
industrial sector and banking sector of
the country.
Due to digitalization, new banking
trends were been introduced like
Blockchain, Artificial Robots, Fintech
companies, UPI, etc.
ADDITIONAL FUNCTIONS OF BANKING THAT
IMPACTS ON INDUSTRIAL DEVELOPMENT
The E-commerce industry has been
directly impacting micro, small &
medium enterprises (MSME) in India
by providing means of financing,
technology, and training and has a
favourable cascading effect on other
industries as well.
Globalization has become a
buzzword today. It generally refers to
how organizations and businesses
develop international influence and
begin operations on an international
level.

28. 1. Vidhi Adhia
2. Vatsala Tiwari
3. Priya Chavan
4. Siddhartha Vichare
5. Aseem Korde
6. Harpreet Singh
7. Dishank Jain
8. Arnav Halder
Team Members

29. THANK YOU