Correct option is B
The Correct Answer Is:(b) Development banks provide long-term financing and support for industrial projects and infrastructure development.
Explanation:
Development banks in India play a crucial role in providing long-term financial support for industrial growth, infrastructure projects, and entrepreneurship development.
Unlike commercial banks, which focus on short-term lending, development banks are specialized financial institutions that finance large-scale industrial and infrastructure projects to boost economic development.
Key development banks in India include:
Industrial Finance Corporation of India (IFCI)
Industrial Development Bank of India (IDBI) (now a commercial bank)
National Bank for Agriculture and Rural Development (NABARD)
Small Industries Development Bank of India (SIDBI)
Export-Import Bank of India (EXIM Bank)
Information Booster:
Primary Functions of Development Banks:
- Long-term project financing for industries, power plants, transport, and urban infrastructure.
- Promoting entrepreneurship and MSME (Micro, Small & Medium Enterprises) sector growth.
- Supporting technology innovation and industrial modernization.
- Providing concessional financing for priority sectors like agriculture, rural development, and exports.
Significance in Industrial Growth:
- Boosts capital formation and industrial expansion.
- Encourages entrepreneurship and start-ups.
- Supports infrastructure and large-scale manufacturing sectors.
Additional Information:
- Regulatory Bodies: institutions like SEBI (for capital markets) and RBI (for banking regulation) serve that purpose.
- Short-term Consumer Lending: Development banks focus on long-term industrial financing.
- Foreign Exchange Reserves Management: This is managed by the RBI.
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