IDBI

The Industrial Development Bank of India is the apex financial institution in the field of development banking in the country. It was established in July, 1964 with the twin objectives of: (a) Meeting the growing financial needs of rapid industrialization in the country, and (b) Coordinating the activities and assisting the growth of all institutions engaged in financing industries. It is an organization with sufficiently large financial resources which not only provides direct financial assistance to the large and medium-large industrial units, but also helps the small and medium industries indirectly by extending refinancing and re-discounting facilities to other industrial financing institutions. Thus, the primary aim of the IDBI has been to integrate the structure of industrial financing institutions and to fill the gap between demand and supply of term finance in the country. Initially, the IDBI was set up as a wholly owned subsidiary of the Reserve Bank of India, but, in 1976, it was taken over by the Government of India and was made an autonomous institution.

UTI

Establishment The Unit Trust of India or UTI was established on 1st February, 1964 under the Unit Trust of India Act, 1963 by the government of India. Its establishment has been a landmark in the history of investment trusts in India. It completed 35 years on 30th June, 1999. The UTI started the sale of units to the public from the July,1964. Objects The basic objective of the UTI is to offer both small and large investors the means of acquiring shares inn the widening prosperity resulting from the steady, industrial growth of the country. There are two primary objectives of UTI, i.e., (i) to promote and pool the small savings from the lower and middle income people who cannot have direct access to the stock exchange, and (ii) to give them an opportunity to share the benefits and fruits of prosperity resulting from rapid industrialization in India. Functions The main functions of UTI are as follows:

To encourage savings of lower and middle-class people. To sell units to investors in different parts of the country.

To covert the small savings into industrial finance. To give them an opportunity to share the benefits and fruits of industrialization in the country. To provide liquidity to units.

Review of Progress (Operations) The UTI has made good progress during the last 35 years. Bulk of the resources mobilised by the UTI have been deployed in the corporate sector. The UTI gives preference to the securities of new companies as to investments. The UTI invests its funds in government securities. Its operations as to sanction and disbursement of loans during the last few years are given in the table below: Sanction and Disbursement of Loans by UTI The total investments of JJTI on 30th June, 1998 stood at Rs. 59,600 crores. i.e., 1997-98, the UTI collected a record sum of Rs. 13.700 crores in its various schemes as against Rs. 9.800 crores in 1996-97. The most popular schemes of UTI is UJP64 under which the UTI earned a record sum of Rs. 3,170 crores as against Rs. 2,600 crores in 1996-97. The rate of dividend under this scheme in 1997-98 was 20%. The income from dividends in the hands of investor is totally exempted from income-tax. Critical Evaluation The, UTI operations have been on increase as is evident from the above table. However, the UTI is not free from criticisms and charges which are given below:

The UTI has been charged with the lack of transparency in its operations. The UTI has been ijperating within the walls of protection provided to it by the Unit Trust Act, 1963. As such, the UTI has not been subject to any regulation from various statutory bodies including the SEBI. The UTI has been manipulated by vested interests to effect the transactions on the stock exchanges. The UTI has been accused of corruption at various levels. Investors do not possess the right to attend the annual general meetings of the trust. The expense ratio of the UTI is quite high. Investors do not get benefits of the capital appreciation of the investments made by them. The pricing policy of the UTI is open for criticism. The operations of the UTI fall much short of the standards of efficiency. The investors are not getting adequate return on their investments.

In spite of the above criticisms, the UTI has emerged as a leading financial institution of India. It has been successful in propagating the unit culture in the country and has offered alternative lucrative channels of investment to small saver