Sources of Business Finance Test - 2

Industrial Finance Corporation of India (IFCI) was established in July 1948 as a statutory corporation under the Industrial Finance Corporation Act, 1948. It was the first development finance institution in the country to cater the needs of the industrial sector.

Its objectives include assistance towards balanced regional development and encouraging new entrepreneurs to enter into the priority sectors of the economy. IFCI has also contributed to the development of management education in the country.

The constitution of IFCI was changed in 1993 from a statutory corporation to a company under the Indian Companies Act, 1956. Subsequently, the name of the company was also changed to "IFCI Limited" with effect from October 1999.

An unsecured debt is an obligation or debt that does not have specific property (like your house or car) serving as collateral for payment of the debt. If you fail to make payment on an unsecured debt, the creditor cannot take any of your property

As the debt raised through commercial paper is totally unsecured, the large and creditworthy firms having good credit rating can issue the CP.

Industrial Credit and Investment Corporation of India (ICICI) was established in 1955 as a public limited company under the Companies Act.

ICICI assists the creation, expansion, and modernisation of industrial enterprises exclusively in the private sector. The corporation has also encouraged the participation of foreign capital in the country.

The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated at the initiative of the World Bank, the Government of India and representatives of Indian industry.

In the 1990s, ICICI transformed its business from a financial institution limited to development projects to a diversified financial services group.

At Present ICICI is merged with ICICI Bank. ICICI (Industrial Credit and Investment Corporation of India) is an Indian multinational banking and financial services company headquartered in Mumbai, Maharashtra, Indian, with its registered office in Vadodra.

Debentures come under borrowed funds and are issued for a specified period and to be paid back to the debenture holders after that period.

The funds required for day to day operations i.e. to meet expenses like wages, salary, rent, insurance etc. and investment in current assets i.e. inventory, bills receivable etc.

The RBI regulates commercial papers. CP is a source of short term finance. The maturity period of CP ranges from 90 days to 364 days.

Trade credit is a short term finance provided by one firm to another for routine business transactions.

These receipts are issued by a non US company to Americans to obtain foreign capital. ADRs are bought and sold in American markets like regular stocks.it can be issued only to American citizens and can be listed and traded on a stock exchange of USA.

LIC was set up in 1956 under the LIC Act, 1956 after nationalising 245 existing insurance companies.

LIC mobilises the community’s savings in the form of insurance premia and makes it available to industrial concerns, both public as well as private, in the form of direct loans and underwriting of and subscription to shares and debentures