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Main purpose is to provide assistance to sick but potentially viable units and extend finance for their modernization, expansion or diversification. The Government of India set up the Industrial Reconstruction Corporation of India (IRCI) in April 1971, under the Indian Companies Act mainly to look after special problems of sick units’ and provide assistance for their speedy reconstruction and rehabilitation, if necessary, by undertaking the management of the units and developing infrastructure facilities like those of transport, marketing etc.
In 1984, the Government of India passed an Act converting the Industrial Reconstruction Corporation of India (IRCI) into the Industrial Reconstruction Bank of India (IRBI). IRBI was established in March 1985 to take over IRCI, Now IRBI has to function as the principal all-India credit a reconstruction agency for industrial revival, assisting and promoting industrial development and rehabilitating industrial concerns. It has also to co-ordinate with similar institutions.
The authorised capital of the bank is Rs. 200 crore, out of which the initial paid-up capital is Rs. 50 crore. The bank is empowered to supplement its resources by issuing and selling bonds and debentures, accepting deposits from the public, borrowing from RBI and other institutions. It may also raise foreign currency loans from any bank (if it gets previous approval from the Government of India).
Sources of Funds
Government, borrowing from the IDBI, RBI etc. issue of debentures or bonds to the public or raise deposits from the public or raise deposits from the public.
