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Banking and Financial Institutions With MCQs SIDBI By Navdeep Kaur
SIDBI Mission History "To facilitate and strengthen credit flow to MSMEs and address both financial and developmental gaps in the MSME eco-system"April 2, 1990 under an Act of Small Industries Development Bank of India (SIDBI), set up on Indian Parliament, acts as the Principal Financial Institution for the Promotion, Financing and Development of the Micro, Small and Medium Enterprise (MSME) Vision To emerge as a single window for meeting the financial and developmental needs of the MSME sector to make it strong, vibrant and globally competitive, to position SIDBI Brand as the preferred and customer friendly institution and for enhancement of share holder wealth and highest corporate values through modern technology platform sector and for Co-ordination of the functions of the institutions engaged in similar activities.
Business Domain of SIDBI The business domain of SIDBI consists of Micro, Small and Medium Enterprises (MSMEs), which contribute significantly to the national economy in terms of production, employment and exports. MSME sector is an important pillar of Indian economy as it contributes greatly to the growth of Indian economy with a vast network of around 5.1 crore units, creating employment of about 11.7 crore, manufacturing more than 6,000 products, contributing about 45% to manufacturing output and about 40% of exports in terms of value, about 37% of GDP The business strategy of SIDBI is to address the financial and non-financial gaps in MSME eco-system. Financial support to MSMEs is provided by way of (a) Indirect / refinance to banks / Financial Institutions for onward lending to MSMEs and (b) direct finance in the niche areas like risk capital, sustainable finance, receivable financing, service sector financing, etc. As on March 31, 2017, SIDBI has made cumulative disbursements of about 4.80 lakh crore benefitting about 350 lakh persons. By this way, SIDBl would be complementing and supplementing efforts of banks/ Fls iin meeting diverse credit needs of MSMEs.
Development Outlook In order to promote and develop the MSME sector, SIDBI adopts a Credit Plus' approach, under which, besides credit, SIDBl supports enterprise development, skill up-gradation, marketing support, cluster development, technology modernisation, etc., in the MSME sector through its promotional and developmental support to MSMEs. These P&D support have benefitted more than 2.3 lakh persons in the MSME sector, created more than 1.5 lakh employment and helped in setting up more than 80,000 units, mostly rural enterprises. Funetions of SIDBI (i) SIDBI refinances loans extended by the primary lending institutions to small scale industrial units, and also provides resources support to them (i) SIDBI discounts and rediscounts bills arising from sale of machinery to or manufactured by industrial units in the small scale sector (iii) SIDBI extends seeds capital/soft loans assistance under National Equity Fund Mahila Udyam Nidhi and Mahila Vikas Nidhi and seed capital schemes through specified lending agencies (iv) It provides services like leasing, factoring etc to industrial concerns in the small scale sector
Important functions performed by of SIDBl include: 1. To initiate steps for technological up-gradation and modernisation of existing units. 2. To expand the channels for marketing the products of SSI sector in domestic and international markets. 3. To promote employment oriented industries especially in semi-urban areas to create more employment opportunities and thereby checking migration of people to urban areas. The SIDBI's financial assistance to small-scale industries is channelised through the existing credit delivery system comprising State Financial Corporation, State Industrial Development Corporations, Commercial Banks, and Regional Rural Banks.
The SIDBI introduced two new schemes during 1992-93; equipment finance scheme for providing direct finance to existing well-run small-scale units taking up technology up-gradation, modernisation, and refinance for resettlement of voluntarily retired workers of the National Textile Corporation (NTC). Over the years assistance sanctioned to backward areas amounts to Rs. 657 crore accounting for 18% of the total sanctions. Disbursements to backward areas, amounts to Rs. 486 crore accounting for 17.8% of the total assistance disbursed The other new scheme launched was venture capital fund exclusively for small -scale units, with an initial corpus of Rs. 10 crore. It enrolled itself as an institutional member of the OTC Exchange of India (OTCEI). SIDBI also provides financial support to National Small Industrial Corporation (NSIC) for providing leasing,rest goes to supplementary services hire-purchase, and marketing support to the for various purposes. industrial units in the small-sector. The share of the SSls in refinance is 82.3%, distantly followed by small road transport operators (SRTOs). New projects account for 67.9% of the total assistance sanctioned, distantly followed by expansion Idiversification (11.6%), modernisation (6.2%), and the
The Industrial Investment Bank of India was a 100% government of India-owned financial investment institution. It was established in 1971 by resolution of the Parliament of India uls 617 of the Companies Act. The bank was headquartered at Kolkata and had presence in New Delhi, Mumbai, Chennai, Bengaluru, Ahmedabad and Guwahati The Industrial Reconstruction Corporation of India Ltd., set up in 1971 for rehabilitation of sick industrial companies, was reconstituted as Industrial Reconstruction Bank of India in 1985 under the IRBI Act, 1984 With a view to converting the institution into a full-fledged development financial institution, IRBI was incorporated under the Companies Act 1956, as Industrial Investment Bank of India Ltd. (IIBI) in March 1997. IlBI offered a wide range of products and services, including term loan assistance for project finance, short duration non-project asset-backed financing, working capital/other short-term loans to companies, equity subscription, asset credit, equipment finance and investments in capital market and money market instruments.
In 2005, a merger of lIBI, IDBI and IFCI was considered, but IIBl refused and it was decided in 2006-2007 to close the bank As of 2011, the bank operated from its sole remaining office in Kolkata. Deloitte and Touche was appointed to dispose of lIBI's Non-Performing assets. The bank's closure was announced in the Budget 2012. The clientele of the bank included Videocon, Dr Morepen, Perfect Threads, Clutch Auto Limited, JSW Ispat and LML Motors.
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