Industrial Reconstruction Corporation of India (IRCI/IRBI/IIBI)

A bank spent 41 years trying to rescue India’s failing companies. In 2012, the government decided to close the bank too.

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Indian Economy · IndEco0223

IRCI → IRBI → IIBI

Three Names, One 41-Year Institution

Apr 1971

IRCI is set up, to rehabilitate sick industrial units.

Mar 1985

Reconstituted as a statutory corporation, IRBI.

Mar 1997

Reincorporated as a full DFI, IIBI.

2012

IIBI is officially wound up, after 41 years.

Older Than the Institution Meant to Replace It

IRCI/IRBI predates BIFR, the quasi-judicial body that formally took over determining industrial sickness — BIFR only arrived in January 1987, a full 16 years after IRCI’s founding.

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Timeline

• April 1971: The Industrial Reconstruction Corporation of India (IRCI) is set up, to rehabilitate sick industrial units.
• March 1985: IRCI is reconstituted as a statutory corporation, the Industrial Reconstruction Bank of India (IRBI).
• March 1997: IRBI is reincorporated as the Industrial Investment Bank of India (IIBI), a full development financial institution.
• 2012: IIBI is officially wound up, ending the institution’s 41-year existence.

Must Know

• The Industrial Reconstruction Corporation of India (IRCI) was set up in April 1971, to rehabilitate sick industrial units.
• It was headquartered in Calcutta, with an initial share capital of ₹10 crore.
• In March 1985, it was reconstituted as a statutory corporation, the Industrial Reconstruction Bank of India (IRBI).
• In March 1997, IRBI was reincorporated as the Industrial Investment Bank of India (IIBI), a full development financial institution.
• IIBI was officially wound up in 2012, ending the institution’s 41-year existence.

Good to Know

• IRCI started as a public limited company, under the joint control of the Reserve Bank of India and the Central Government.
• IRBI’s 1985 conversion was carried out under a dedicated law, the IRBI Act, 1984.
• As IRBI, the institution held an authorised capital of ₹200 crore, and a paid-up capital of ₹50 crore.
• IIBI’s closure followed a rejected 2005 proposal, to merge it with IDBI and IFCI.
• Deloitte and Touche was later appointed, to help dispose of IIBI’s non-performing assets.

Test Yourself

Please wait…

1. In which year was the Industrial Reconstruction Corporation of India (IRCI) set up, and for what purpose?

1971, to rehabilitate sick industrial units

1969, to nationalise private commercial banks

1991, to liberalise India’s industrial licensing regime

1985, to regulate India’s stock exchanges

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Great to Know

• IRCI/IRBI predates India’s more famous sick-industry framework. The Sick Industrial Companies Act, and its Board, BIFR, only arrived in January 1987.
• IRBI worked as a specialised lender for sick-unit rehabilitation. BIFR, by contrast, was a quasi-judicial body, formally determining sickness and ordering revival or closure.
• This institution’s history reflects a broader pattern. Many of India’s early development finance institutions were eventually merged, restructured, or wound up, once commercial banks took over their role.
• The institution’s full career spanned three different names and legal structures, across 41 years, from 1971 to 2012.
• IIBI’s closure was formally announced in the Union Budget, 2012.