The Industrial Development Bank of Pakistan (IDBP) was founded in August 1961, as the substitute of Pakistan Industrial Finance Corporation (PIFC), which was established in 1949 to provide medium and long-term credit to industries.
The IBDP had suffered from significant losses due to loan defaults by the mid-2000s, IDBP had accumulated loss of about 27 billion and was insolvent. The Pakistani government merged the profitable investment corporation of Pakistan with or into IDBP to improved its weak financial position. The government continues to explore ways to make IDBP economical viable.
For the purpose of restructuring of the bank, the president of Pakistan promulgated the “Industrial Development Bank of Pakistan (Reorganizing and Conversion) Ordinance” on August 03, 2006. According to that Ordinance, all assets, liabilities, business and staff of the bank have to be taken over by a new public company to be incorporated under the Companies Ordinance 1984. Accordingly, in pursuance of IDBP (R & C) Ordinance 2006, a company “Industrial Development Bank Limited” has been incorporated on April 10, 2007.
CAPITAL:
IDBL is wholly owned by Government of Pakistan with 57% of its shares held by Federal Government, 36% by State Bank of Pakistan and 7% by Provincial Government and other public sector corporations.
MANAGEMENT:
The general directions and superintendence of the officers of the bank vest in the Board of Directors, consisting of a Chairman / Managing Director and other Directors. All the affairs of IDBP are directly controlled by the finance division of the government.
HEAD OFFICE AND BRANCHES:
The Headquarter of Industrial Development Bank Limited is in Karachi.
Beside Headquarter, its 02 branches are working in Karachi and Lahore.
FEATURES
A unique feature of IDBL is that besides Development Financing Institution it is also a scheduled bank and authorized dealer of foreign exchange. Thus IDBL, extends all kinds of merchant, investment and commercial banking services to its clients which include provision of short term advances, trade financing, lease financing, guarantees and underwriting. Thus IDBL operates a full-fledged Bank in addition to its role as a development financing institution.
The important features of Industrial Development Bank are as under:
- It is a scheduled Bank.
- It was established under a special ordinance.
- Its sources depend on the following means:
- Bank’s own capital.
- Deposits of the people.
- Loans collected from Government of Pakistan and international institutions.
- Annual Profit.
- This bank floats loans of different kinds for the establishment
and progress of industries.
- Rate of interest of the Bank is fixed according to the rates followed by the other banks. The Government decreases this rate keeping in view the special circumstances and backwardness of areas.
DUTIES OR FUNCTIONS
This bank performs the following duties to accelerate the speed of industrial progress.
- Issuance of Loans:
This bank issues loans for the setting up and extension of industries.
- Industries for the production of different articles from the agricultural raw material.
- Industries for the production of Engineering machinery and electric goods.
Industries of Chemical goods.
- Industries of mining and natural gas.
- Industries for the production of paper, stationery and wooden articles.
- Industries of textile, transport and production of films.
This bank provides loans on comparatively soft conditions and lesser rates of interest for the development of backward areas so that opportunities for employments may also arise there due to the setting up of industries.
- Direct Investment:
This bank sets up industrial institutions under its supervision by choosing different areas keeping in view their economical progress.
- Purchase of Shares and Debentures:
This bank purchases shares and debentures of different industrial institutions to provide them finances. Sometimes it also grants loans for the purchase of shares and debentures.
- Help in Boosting up of Exports:
This bank encourages fully the industries, which produce export articles. It gives them loans for the purchase of raw material and transport. Much foreign exchange is earned due to increase in export.
- Consultancy Services:
Industrial bank also gives technical suggestions to borrowing institutions. This bank has also set up a department for this purpose. This department also makes arrangements for the training of industrial workers besides giving the suggestions to industries, which are set up in different areas.
DEPOSITS SCHEMES
- Business Deposit Account:
- This is an attractive scheme best suited to business organizations.
- The Minimum Deposit Limit is Rs. 100,000/-
- Multiple deposits and withdrawal are allowed.
- Profit is calculated on daily deposit.
- Profit is distributed on six monthly basis.
Zakat and W.H.Tax are applicable according to law.
- Term Deposit:
- Under this scheme the investors may place funds for a fixed period ranging from a minimum of one year to a maximum of three years.
- The Minimum Deposit Limit is Rs. 100,000/-.
- The rate of profit on this deposit is upto 6.5% p.a.
- Saving Bank Account:
The profit offered by IDBP on this account is comparable to the highest profit given by other banks.
PERFORMANCE QF I.D.B.P,
- IDBL has the unique distinction of financing the first ever projects for a diversified list of products.
- This bank is playing a vital role in providing foreign exchange to the Industries.
- The industrial production of the country, national income and rate of employment has increased due to the loans provided by the bank.
- Export trading has got enormous increase due to in time availability of funds from the export industries.
Industrial bank has provided many chances of employment by establishing different industrial units.
