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i. Development Functions

a. Establishment of Industries, Promotion and Research of Technology
It searches the technology required for the new industries, analyses the market
and identifies the priority sector and provides managerial and administrative skill and
knowledge. It helps in collecting capital and establishing such new industries in the
feasible locations.

b. Helps Industrial Organizations
Development Bank helps the industries directly or indirectly for preparation of
plans and policies and implementing. It also helps to manage capital items such as land,
building, furniture, vehicle, machineries, etc. as well as raw materials required for the
smooth running of the industries.
c. Identifies Priority Sector
The bank identifies and selects the priority sector of the country. After selecting
them, it provides the necessary resources to carry out the selected development works.

d. Maintains Proper Environment for Investment
Development Bank encourages and attracts national and international investors. For
this, it maintains proper environment for investment and gives the guarantee of security
for their investment.
e. Analysis of Product
Development Bank analyses the possible market in the agricultural and industrial
sectors before launching the product. It analyses the product considering the availability
of resources, labours, market, condition, product demand, transportation, etc. After these
analyses, it provides factual information to the public.

ii. Banking Functions
a. Grants Loan
It provides short term, mid term, long term loans in agricultural and industrial
sectors against the security deposit. It grants loan to purchase improved seeds, fertilizers,
agricultural tools, machinery and equipment as well as to expand and develop industries.
b. Accepts Deposit
It accepts scattered savings from the public under Current A/c, Saving A/c and Fixed
deposit A/c. It also provides withdrawal facility to its depositors. Account operation of
development bank is similar to commercial bank.

c. Purchases and Sales of Shares and Debentures
It purchases and sells shares, debentures, bill of exchange, etc. issued by different
industries. In case of bill of exchange, the concerned party should pay its value within 3
months.

74 Aakar’s Office Practice and Accountancy - 10 Financial Institutions 75