• The need for setting aside adequate long term funding to finance industrial development was felt when India embarked on its model of planned growth with ambitious growth targets. It was perceived that the banks would not be able to set aside such quantum of long term funding as they were mainly financed by short-term deposits. Moreover, specialized financial institutions would be able to develop expertise in project financing, which was lacking among the banks. The banks were to concentrate on working capital financing.
• National and state financial institutions were set up to provide such funding to large, medium and small industry. Further a number of specialized institutions were also set up to take care of specific areas or sectors. These institutions were provided access to low cost long-term funds from the banking system for this purpose. The specialised financial institutions mainly act as refinancing institutions in those particular sectors.
• Banks and financial institutions in case of large loans generally resort to collective lending. Collective funding takes the form of consortium lending or credit syndication. Both types of funding are similar with small differences. One of the main differences being the terms and conditions under which the loan is sanctioned. In consortium lending the terms and conditions are the same for all participating institutions whereas in the case of credit syndication each participating institution can stipulate its own terms and conditions.

List of large financial institutions in India
Know more about financing schemes of institutions to industry
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