Which of the followings are the national financial institutions?

(A) Industrial Development Bank of India
(B) Industrial Finance Corporation of India
(C) The State Industrial Development Corporation
(D) United Nations Development Programme
(E) State Financial Corporations

Choose the correct answer from the options given below:

Correct option is C

National financial institutions refer to organizations established within a country to support and regulate industrial and financial development through the provision of finance, advisory, and infrastructure support.

• (A) Industrial Development Bank of India (IDBI) – Correct
  IDBI was established in 1964 under an Act of Parliament to provide credit and other financial facilities for the development of industry in India.

• (B) Industrial Finance Corporation of India (IFCI) – Correct
  Established in 1948, IFCI is one of the oldest development finance institutions in India, providing financial support to diversified sectors.

• (C) State Industrial Development Corporations (SIDCs) – Correct
  These are state-level institutions created for industrial promotion and financing, and are recognized as part of the national financial institutional framework.

• (D) United Nations Development Programme (UNDP) – Incorrect
  This is an international organization, not a national institution. It supports development globally but isn’t part of India’s national financial system.

• (E) State Financial Corporations (SFCs) – Correct
  These institutions operate at the state level and are established under the State Financial Corporations Act, 1951 to assist small and medium enterprises in financing.

Thus, the correct combination of national financial institutions is: (A), (B), (C), and (E).

Information Booster:

1. IDBI played a pivotal role in funding industrial projects and was later converted into a commercial bank but remains historically significant as a financial institution.

2. IFCI, initially government-owned, now a public company, key in funding infrastructure and industrial projects.

3. SIDCs help in identifying, promoting, and financing industries in their respective states.

4. SFCs cater to small and medium enterprises, bridging the credit gap at regional levels, and promoting balanced regional development.

5. These institutions form the backbone of India’s financial system, enabling inclusive industrial growth.

6. They play roles in infrastructure finance, industrial project development, refinancing, and SME support.

Additional Knowledge:

(D) United Nations Development Programme (UNDP):

• It is a global development network of the United Nations, headquartered in New York.

• UNDP works with nations to eradicate poverty, reduce inequalities, and promote sustainable development.

• It offers technical and policy advice, capacity building, and funding to developing countries, including India.

• However, since it is not an Indian institution, it cannot be classified as a national financial institution.