IDBI Full Form
Industrial Development Bank of India
What does IDBI stand for? A finance term, explained.
IDBI Full Form in English, letter by letter
IDBI is the Industrial Development Bank of India, set up in 1964 to fund industry and now better known as IDBI Bank.
IDBI Full Form in Indian Languages
IDBI began as a lender that only industries could borrow from, and it is a bank today. Here is Industrial Development Bank of India, with its name in six Indian languages.
Born as a development finance institution
IDBI stands for Industrial Development Bank of India. It was set up in July 1964 under an Act of Parliament to supply the long-term money that commercial banks did not: funds for factories, machinery, power plants and expansion during the Five Year Plans.
Until 1976 it was a subsidiary of the Reserve Bank of India. That year ownership passed to the Government of India.
IDBI did not compete with commercial banks for everyday lending. It financed projects with long repayment periods, which a bank living on savings deposits could not commit to for a decade, and it often worked with state financial corporations.
What IDBI financed
Through the 1960s, 70s and 80s it was a major source of term finance for large industrial projects such as steel, fertiliser, cement, power and engineering, working with commercial banks and state corporations and not replacing them.
It also helped build other institutions. The Small Industries Development Bank of India (SIDBI) was set up in 1990 to serve small enterprises, and IDBI was among the financial institutions that promoted the National Stock Exchange in the early 1990s.
From DFI to bank
Liberalisation in the 1990s changed the arithmetic. Industrial borrowers could raise money from markets and banks, cheap institutional funding dried up, and development finance institutions across India came under strain. IDBI restructured through the decade and moved towards banking.
In the mid-2000s the change was completed. IDBI Bank Ltd was created in 2004 and the parent IDBI merged into it in 2005. The institution that began as a wholesale industrial lender now takes savings accounts, gives home loans and runs branches. The name still says Development Bank, but the business is mainstream banking.
LIC took control in 2019
In January 2019 the Life Insurance Corporation of India acquired a majority stake in IDBI Bank and became its promoter, after regulatory clearance. It is one of the few cases in India of an insurer controlling a bank.
The RBI then classified IDBI Bank as a private sector bank, though the government and LIC together still hold a large share. The two have been working on a sale of their combined stake for some years, and the timing and outcome have changed more than once, so check the latest news before relying on any statement about ownership.
Where IDBI sits today
IDBI Bank runs a nationwide branch and ATM network and lends to retail customers (home, auto and personal loans) as well as to corporates and small businesses.
The development-finance functions IDBI once performed now sit with other institutions: SIDBI for small enterprises and NABARD for agriculture and rural credit. For a student, the useful distinction is historical: the Industrial Development Bank of India was the project lender of the licence era, and IDBI Bank is what it became when that era ended.
IDBI Bank also recruits through its own exams, notably for Junior Assistant Manager and for Executive posts, advertised on its website. The bank usually conducts an online test, followed by document checks and an interview, and may ask candidates to complete a banking course before posting. Details change every year, so use the notification on the bank's own website rather than third-party summaries. Customers with queries on accounts, loans or complaints should contact the bank directly, using the helpline printed on its website.
The Industrial Development Bank of India shows how Indian finance changed: a state-created project lender from 1964, restructured after liberalisation, turned into a bank and then taken over by LIC. The acronym stayed while almost everything else did not.
IDBI Full Form: Common Questions
What is the full form of IDBI?
IDBI stands for Industrial Development Bank of India. It was created in 1964 as a development finance institution to provide long-term funds for industrial projects, and it later became a commercial bank.
Is IDBI Bank a government bank?
The RBI classifies it as a private sector bank, but the Government of India and LIC together still hold a large share, so the state remains a significant owner. A sale of this stake has been under way for some time.
What is the difference between IDBI and IDBI Bank?
The Industrial Development Bank of India was the original industrial lender set up in 1964. IDBI Bank is the commercial banking entity that grew out of it, which has branches, savings accounts and retail loans.
When did LIC acquire IDBI Bank?
LIC took management control of IDBI Bank in January 2019 and became its promoter. It is one of the very few cases in India where an insurer controls a bank.
Does IDBI still lend to industries?
IDBI Bank lends to corporate, MSME and retail borrowers like any commercial bank. The development finance role it was created for now sits with institutions such as SIDBI and NABARD.
Is IDBI the same as SIDBI?
No. SIDBI, the Small Industries Development Bank of India, was set up in 1990 and focuses on small enterprises. IDBI is a separate institution, now run as IDBI Bank.