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With reference to the financial institutions in India, which of the following is/are the Development Financial Institutions in India?
  1. Reserve Bank of India
  2. National Bank for Agriculture and Rural Development
  3. National Housing Bank
  4. SIDBI
Select the correct answer using the code given below.
  • a)
    1 only
  • b)
    1 and 3 only
  • c)
    1 and 2 only
  • d)
    2 and 3 only
  • e)
    2, 3 and 4 only
Correct answer is option 'E'. Can you explain this answer?
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Most Upvoted Answer
With reference to the financial institutions in India, which of the fo...
Development Financial Institutions (DFIs) are specialized financial institutions that provide long-term finance for industrial and infrastructure projects. In India, there are several DFIs that have played a significant role in the country's economic development. The correct answer to the question includes the following options:

- National Bank for Agriculture and Rural Development (NABARD): NABARD is a development financial institution that focuses on providing credit and other facilities for the promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts, and other rural sectors. It was established in 1982 and operates under the guidance of the Reserve Bank of India (RBI). NABARD provides financial assistance to various institutions and individuals involved in rural development activities.

- National Housing Bank (NHB): NHB is another development financial institution that promotes and regulates housing finance in India. It was established in 1988 as a wholly-owned subsidiary of the RBI. NHB provides refinance facilities to housing finance companies, banks, and other financial institutions engaged in housing finance. It also promotes the development of housing finance institutions and provides support for the housing sector's overall growth.

- Small Industries Development Bank of India (SIDBI): SIDBI is a specialized development financial institution that focuses on the promotion, financing, and development of micro, small, and medium enterprises (MSMEs) in India. It was established in 1990 as a wholly-owned subsidiary of the IDBI (Industrial Development Bank of India). SIDBI provides various financial and non-financial assistance to MSMEs, including direct and indirect financing, venture capital support, and advisory services.

- Reserve Bank of India (RBI): While the RBI is not primarily a development financial institution, it plays a crucial role in the overall development of the financial system in India. As the country's central bank, the RBI formulates and implements monetary policies, regulates and supervises financial institutions, and promotes the stability and development of the financial sector. The RBI provides refinancing facilities to various banks and financial institutions to support their lending activities.

In conclusion, the correct answer to the question is option 'E' - 2, 3, and 4 only. NABARD, NHB, and SIDBI are the development financial institutions in India, while the RBI plays a broader role in the country's financial system development.
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With reference to the financial institutions in India, which of the fo...
A Development Financial Institution (DFI)
  • It is defined as “an institution endorsed or supported by the Government of India primarily to provide development/Project finance to one or more sectors or sub-sectors of the economy.
  • India’s first DFI was operationalized in 1948 and it set up State Financial Corporations (SFCs) at the state level after passing of the SFCs Act, 1951, succeeded by the development of the Industrial Finance Corporation of India (IFCI).
  • DFIs can be classified into four categories of institutions as per their functions:
    • National Development Banks e.g. IDBI, SIDBI, ICICI, IFCI, IRBI, IDFC
    • Sector-specific financial institutions e.g. TFCI, EXIM Bank, NABARD, HDFC, NHB
    • Investment Institutions e.g. LIC, GIC, and UTI
    • State-level Institutions e.g. State Finance corporations and SIDCs
    • Specialized development financial institutions (DFIs), such as Industrial Finance Corporation of India (IFCI), Industrial Development Bank of India (IDBI), National Bank for Agriculture and Rural Development (NABARD), National Housing Board (NHB) and Small Industry Development Bank of India (SIDBI), with majority ownership of the RBI were launched to meet the long-term financing needs of industry and agriculture in India for driving growth in our economy post-independence.
Though, RBI does not engage in direct financing. There is no specific use of the term 'DFI' in either the RBI Act, 1934 or the Companies Act, 1956 or various statutes establishing DFIs.
Hence, Option 4 is the correct answer.
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With reference to the financial institutions in India, which of the following is/are the Development Financial Institutions in India? Reserve Bank of India National Bank for Agriculture and Rural Development National Housing Bank SIDBISelect the correct answer using the code given below.a)1 onlyb)1 and 3 onlyc)1 and 2 onlyd)2 and 3 onlye)2, 3 and 4 onlyCorrect answer is option 'E'. Can you explain this answer?
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With reference to the financial institutions in India, which of the following is/are the Development Financial Institutions in India? Reserve Bank of India National Bank for Agriculture and Rural Development National Housing Bank SIDBISelect the correct answer using the code given below.a)1 onlyb)1 and 3 onlyc)1 and 2 onlyd)2 and 3 onlye)2, 3 and 4 onlyCorrect answer is option 'E'. Can you explain this answer? for Banking Exams 2025 is part of Banking Exams preparation. The Question and answers have been prepared according to the Banking Exams exam syllabus. Information about With reference to the financial institutions in India, which of the following is/are the Development Financial Institutions in India? Reserve Bank of India National Bank for Agriculture and Rural Development National Housing Bank SIDBISelect the correct answer using the code given below.a)1 onlyb)1 and 3 onlyc)1 and 2 onlyd)2 and 3 onlye)2, 3 and 4 onlyCorrect answer is option 'E'. Can you explain this answer? covers all topics & solutions for Banking Exams 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to the financial institutions in India, which of the following is/are the Development Financial Institutions in India? Reserve Bank of India National Bank for Agriculture and Rural Development National Housing Bank SIDBISelect the correct answer using the code given below.a)1 onlyb)1 and 3 onlyc)1 and 2 onlyd)2 and 3 onlye)2, 3 and 4 onlyCorrect answer is option 'E'. Can you explain this answer?.
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