1. What are the functions of Development Banks? Describe its Quantitative and Qualitative roles.
Development Banks in India
A Development Bank is a polygonal development finance institution devoted to improving the social and monetary development of its associate nations. Its main emphasis is the welfare of the people. For example the Asian Development Bank's overarching goal is to decrease poverty in A development bank's policies or programs center on the following priorities:
a) Economic Growth
b) Human Development
c) Gender and Development
d) Good Governance
e) Environmental Protection
f) Private Sector Development
g) Regional cooperation
The main functions of a Development Bank:
a) Increase loans and equity investments to its developing associate countries (DMCs) for their monetary and social development.
b) Provides technical help for the planning and implementation of development projects and programs and for advisory services.
c) Promotes and facilitates speculation of public and private capital for growth and development.
d) Responds to requests for assistance in coordinating growth policies and plans of its increasing member countries
Formation of Development Banks In
Development banks were set up in
In order to perform their role, Development Banks were extended funds in the shape of Long Term Operations (LTO) Fund of the Reserve bank of
On the asset side, their operations were marked by near absence of competition. A large variety of economic institutions have come into existence over the years to perform a type of financial actions While some of them operate at all-India level, others are state level institutions.
Besides providing direct loans, financial institutions also extend economic assistance by way of underwriting and direct contribution and by issuing guarantees. Recently, some Development Banks have started extending short term/working capital finance, although long term lending continues to be their major activity.
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