An entrepreneur faces many problems while setting up a new unit.

One has to undertake feasibility report, prepare project report, complete registration formalities, seek approval from various agencies etc. All these things require time, money and energy. Some people a r e n o t able to undertake this exercise or some do not even take initiative. F i n a n c i a l institutions are the expense and manpower resources for undertaking the exercise of starting a new unit. So these institutions take up this work on behalf of entrepreneurs. Some units may be set up jointly with some financial institutions and in that case the formalities are completed collectively. Some units may not have come up had they not received promotional help from financial institutions. The promotional role of financial institutions is helpful in increasing the development of a country . 4. Development of Backward Areas Some areas remain neglected because facilities needed for setting up new units are not available here. The entrepreneurs set up new units at those places which a r e a l r e a d y developed. It causes imbalance in economic development of some areas. In order to help the development of backward areas, financial institutions provide special assistance to entrepreneurs for setting up new units in these areas. IDBI, IFCI, ICICI give priority in giving assistance to units set up in backward areas and even charge lower interest rates on lending. Such efforts certainly encourage entrepreneurs to set up new units in backward areas. The industrial units in these areas improve basic amenities and create employment o p p o r t u n i t i e s . T h e s e m e a s u r e s w i l l c e r t a i n l y h e l p i n i n c r e a s i n g t h e e c o n o m i c development of backward areas. 5. Planned Development Financial institutions help in planned development of the economy. Different institutions earmark their spheres of activities so that every business activity is h e l p e d . S o m e institutions like SIDBI, SFCI's especially help small scale sector while IFCI and SIDC'sfinance large scale sector or extend loans above a certain limit. Some institutions help different segments like foreign trade, tourism etc. In this way financial institutions devise their roles and help the development in their own way. Financial institutions also follow the development priorities set by central and state governments. They give preference to those industrial activities which have been specified in industrial policy statements and in five year plans. Financial institutions help in the overall development of the country 6. Accelerating Industrialization Economic development of a country is linked to the level of industrialization there. The setting up of more industrial units will generate direct and indirect employment, make available goods and services in the country and help in increasing the standard of living. Financial institutions provide requisite financial, managerial, technical help for setting up new units. In some areas private entrepreneurs do not want to risk their funds or gestation period His long but the industries are needed for the development of the area. Financial i n s t i t u t i o n s p r o v i d e s u f f i c i e n t f u n d s f o r t h e i r development. Since 1947, financial institutions have played a key role i n a c c e l e r a t i n g t h e p a c e o f i n d u s t r i a l i z a t i o n . T h e country has progressed in almost all areas of economic development. 7. Employment Generation Financial institutions have helped both Direct and indirect employment generation. They have employed many persons to man their offices. Besides office staff, institutions need the

services of experts which help them in finalizing lending proposals. These institutions help in creating employment by financing new and existing industrial units. They also help in creating employment opportunities in backward areas by encouraging the settingup of units in those areas, Thus financial institutions have helped in creating new and better job opportunities. ALL INDIA DEVELPOMENTS BANKS In India, various financial institutions were set up after i n d e p e n d e n c e o n l y . T h e Government of India has taken sleeps to set up institutions which assist various sectors of The economy. At present the country has 12 institutions at the national level and 46 at testate level. The All India Financial Institutions comprise six: All -India Development Banks, namely: Industrial Development Bank of India, Industrial Finance Corporation of India Ltd., Industrial Credit and Investment Corp oration of India Ltd., Small Industries Development Investment Bank of India, Industrial Reconstruction Bank of India andSCICI Ltd. Specialized institutions comprise of Risk Capital and Technology Finance Corporation Ltd., Technology Development and Information Company of India Ltd. and Tourism Finance Corporation of India Ltd. There are three investment institutions: Life I n s u r a n c e C o r p o r a t i o n o f I n d i a L t d . , U n i t T r u s t o f I n d i a a n d G e n e r a l I n s u r a n c e Corporation of India. At state level there are 18 State Finance Corporations and 18 state finance corporations and 28 state industry development corporations. INDUSTRIAL FINANCE CORPORATION OF INDIA (IFCI) At the same time raw industrial units were to be set up for industrializing the country. Government of India came forward to set up the Industrial Finance Corporation of India(IFCI) in July 1948 under a Special Act. The Industrial Development Bank of India,