BANKING AFFAIRS

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

What is meant by development Oriented banking?

A	Infrastructure financing
B	Extending loans to States, which are un-development
C	Taking up the task of development of the economy by providing support to under privileged sections of the society
D	None of these

Explanation:

Detailed explanation-1: -Taking up the task of development of the economy by providing support to under privileged sections of the society.

Detailed explanation-2: -Development banks are specialized financial institutions. They provide medium and long-term finance to the industrial and agricultural sector. They do term lending, investment in securities and other activities. They even promote saving and investment habit in the public.

Detailed explanation-3: -Development banks aid industrial firms in various ways, not just by providing medium-and long-term loans. These banks buy the firms’ bonds and debentures, underwrite their shares and debentures and guarantee loans from local and international sources.

Detailed explanation-4: -India had set up extremely successful DFIs such as Industrial Finance Corporation of India (IFCI) in 1948, Industrial Development Bank of India (IDBI) in 1964 and Industrial Credit and Investment Corporation of India (ICICI) in 1955. IFCI and IDBI were fully-owned Government of India (GoI) enterprises.

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