The bulk of term finance required by large and medium industry is provided by term lending institutions which include all India Institutions viz. Industrial Development Bank of India (IDBI), Industrial Finance Corporation of India (IFCI), Industrial Reconstruction Bank of India (IRBI), Small Industries Development Bank of India (SIDBI), etc.
Financial Institutions channel the funds mobilized by them into productive avenues. They make available funds in bigger lots to needy industrial sector. These institutions act as conduits through which scattered savings are aggregated and out to productive channels. Besides, financial institutions help in allocation of funds between different industries and different sectors of the economy in consonance with the priorities laid down in the plans. They, finance to those industries which seek to make a strong base for accelerating the pace of industrialization and foster fast economic development. Today, financial institutions are an instrument in developing the backward areas through rapid industrialization by providing long term finance on concessional rates and help entrepreneurs in selection of projects and make available technical know-how at cheaper rates.
Term loans from financial institutions and banks are a syndicated activity. For big projects financial institutions provide finance on a consortium basis and commercial banks also join them where ‘gap’ is left in financing arrangements of the project costs.
The All-India Financial Institutions comprise six All-India Development banks (AIDBs), three Specialized Financial Institutions (SFIs) and there Investment Institutions. At the state level, there are 18 State Financial Corporations (SFCs) and 28 State Industrial Development Corporations (SIDCs)
Among the AIDBs, IDBI, IFCI, IRBI and SCICI provide financial assistance to medium and large industries, whereas SIDBs caters to the needs of small and tiny industries. The AIDBs also undertake promotional and developmental activities. Of the SFIs, RCTC and TDIC provide risk capital, venture capital and technology development finance and TFCI extends finance to hotels and tourism-related projects. Among the investment institutions, LIC takes care of the business of life insurance, whereas GIC offers general insurance facilities. Both LIC and GIC deploy their funds in accordance with the priorities set out for them. UTI mobilizes the savings of the society through sale of units and channelizes them into corporate investments. The investment institutions are major players on the secondary market; they also extend assistance to the corporate sector by way of term loans, underwriting, direct subscription to equity and debentures. The SFSs provide finance mainly to small and medium enterprises, whereas SIDCs cater to the needs of medium assistance, the SFCs and SIDCs also play a promotional and developmental role.
With the increasing integration of Indian Economy with the global economy, the financing requirements of corporate sector have undergone tremendous change, and accordingly, financing institutions in India have re-oriented their policies and product range with much sharper customer focus to suit the varied needs of the corporate. With a view to leverage new opportunities thrown open by the developments in the economy, the financial institutions have set up several subsidiaries/ associate institutions offering a wide range of new products and services covering areas such as commercial banking, consumer finance, and investor and custodian services, broking, venture capital financing, infrastructure financing, registrar and transfer services, credit rating and E-commerce.
List of banks offering term-loans in India:
Here is a lost of top 10 banks in India who are offering term loans. The Loan amount, tenure of the loan, eligibility criteria and loan period can be directly referred from these bank websites.
- State Bank of India
- Axis bank
- ICICI Bank
- Punjab National Bank
- UCO Bank
- HSBC Bank
- Industrial Development Bank of India (IDBI)
- Standard Chartered Bank
- Andhra Bank
- HDFC Bank