The Hindu Business Line : Wider choice for fixed-income investors

The Hindu Business Line : Wider choice for fixed-income investors

IFCI is an interesting organisation. It was the earliest of the DFI (Development Financial Institution) set up by Government of India in 1948 ie., immediately after independence, much before the Five Year Plans commenced in 1951 or India's Industrial Policy was finalised. IFCI has seen several ups and downs in the last six decades. In the last few years, there was also a talk that it would be wound up too.

Much later to its formation, we saw the birth of a few more strong industrial financial organisations like ICICI in 1955 which was formed with the assitance of World Bank to cater to foreign currency loans (since reverse merged with ICICI Bank in 2002); IDBI, an off-shoot of RBI for all refinancing activities etc., in 1964 (alongwith UTI), which again was reverse merged with IDBI Bank a few years back. And now, there are host of other important DFIs like LIC, NABARD, SIDBI, EXIM Bank, ECGC, IDFC, IL&FS, IICFL, PFC, REC, et al.

It is heartening to read that IFCI is now offering Tax Saving, Infrastructure Bonds of ten years tenure with different options and at very competitive rates of interest too. There is option for conversion after five years lock-in period too. These are tradeable after five years. Looks like an attractive investment option to individuals too for saving as well as tax-planning purposes, by investing Rs. 20,000 and thereon. So many positive points have been written about IFCI like strong Capital Adequacy Ratio. The last date is August 31, 2010.