Small Industries Development Bank of India

Last updated

Small Industries Development Bank of India (SIDBI)
SIDBI LOGO.png
Agency overview
Formed2 April 1990;34 years ago (1990-04-02)
Type Regulatory Body
Jurisdiction Ministry of Finance , Government of India
Headquarters Lucknow, Uttar Pradesh, India
Agency executive
Website www.sidbi.in

Small Industries Development Bank of India (SIDBI) is the apex regulatory body for overall licensing and regulation of micro, small and medium enterprise finance companies in India. It is under the jurisdiction of Ministry of Finance , Government of India headquartered at Lucknow and having its offices all over the country.The SIDBI was established on April 2, 1990, by Government of India, as a wholly owned subsidiary of IDBI Bank . It was delinked from IDBI w.e.f. March 27, 2000. Its purpose is to provide refinance facilities to banks and financial institutions and engage in term lending and working capital finance to industries, and serves as the principal financial institution in the Micro, Small and Medium Enterprises (MSME) sector. SIDBI also coordinates the functions of institutions engaged in similar activities. It was established in 1990, [2] through an Act of Parliament. [3]

Contents

SIDBI is one of the five All India Financial Institutions regulated and supervised by the Reserve Bank of India; other four are Exim Bank Of India, NABARD,NABFID and NHB. But recently NHB came under government control by taking more than 51% stake. They play a statutory role in the financial markets through credit extension and refinancing operation activities and cater to the long-term financing needs of the industrial sector. [4]

SIDBI is active in the development of Micro Finance Institutions through SIDBI Foundation for Micro Credit, and assists in extending microfinance through the Micro Finance Institution (MFI) route. [5] Its promotion & development program focuses on rural enterprises promotion and entrepreneurship development. [6] [7]

In order to increase and support money supply to the MSE sector, it operates a refinance program known as Institutional Finance program. Under this program, SIDBI extends Term Loan assistance to Banks, Small Finance Banks and Non-Banking Financial Companies. Besides the refinance operations, SIDBI also lends directly to MSMEs. [8] [9]

Non-Financial Intervention

As part of non-financial intervention in the MSME sector, SIDBI had also undertaken various measures in the past. Recently, in association with credit rating agency CRISIL and Credit Information Company TransUnion CIBIL it has introduced "CriSidEx" and "MSME Pulse". [10]

CriSidEx, India's first sentiment index for micro and small enterprises (MSEs) has been developed jointly by CRISIL & SIDBI. It is a composite index based on a diffusion index of 8 parameters and measures MSE business sentiment on a scale of 0 (extremely negative) to 200 (extremely positive). The crucial benefit of CriSidEx is that its readings will flag potential headwinds and changes in production cycles and thus help improve market efficiencies. And by capturing the sentiment of exporters and importers, it will also offer actionable indicators on foreign trade. [11] [12]

SIDBI in association with TransUnion CIBIL launched "MSME Pulse" and Microfinance Pulse launched by Equifax, a quarterly report on MSME credit activity, for closely tracking and monitoring the MSME segment in the country. The report is based on a study done on over five million active MSMEs who have access to formal credit, with live credit facilities in the Indian banking system. [13]

SIDBI has launched the ‘Udyami Mitra’ Portal to improve accessibility of credit and handholding services to MSMEs. They can select and apply for preferred banks through this portal. Under the portal entrepreneurs can apply for loan without physically visiting any bank branches and can select from over 1 lakh bank branches, track their application status and avail multiple loan benefits. It also has facility for uploading all necessary documents. Through the portal the MSMEs can also seek handholding support for getting finance. [14] [15] SIDBI has also entered into an arrangement with CSC e-governance Services (CSCeGS) to take Udyami Mitra portal to the unserved and the underserved MSMEs. CSCeGS is a special purpose vehicle (SPV) set up by ministry of electronics and IT ( MeitY) which acts as connect point for various digitally aligned services to villages in the country. [16]

Other activities

SIDBI has floated several other entities for related activities, including:

SIDBI supports the Government of India in its initiatives and work as a nodal agency for some of the schemes related to development of MSMEs, such as Make in India and Startup India.

Related Research Articles

Small and medium-sized enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel and revenue numbers fall below certain limits. The abbreviation "SME" is used by international organizations such as the World Bank, the OECD, European Union, the United Nations, and the World Trade Organization (WTO).

<span class="mw-page-title-main">ICICI Bank</span> Indian private sector bank

ICICI Bank Limited is an Indian multinational bank and financial services company headquartered in Mumbai with a registered office in Vadodara. It offers a wide range of banking and financial services for corporate and retail customers through various delivery channels and specialized subsidiaries in the areas of investment banking, life, non-life insurance, venture capital and asset management.

<span class="mw-page-title-main">CRISIL</span> Indian company providing analytical services

CRISIL Limited, formerly Credit Rating Information Services of India Limited, is an Indian analytical company providing ratings, research, and risk and policy advisory services and is a subsidiary of American company S&P Global.

The IDBI Bank Limited is a development finance institution under the ownership of Life Insurance Corporation of India and Government of India. It was established in 1964 as Industrial Development Bank of India, a development finance institution, which provided financial services to industrial sector. In 2005, the institution was merged with its commercial division, IDBI Bank, forming the present-day banking entity and was categorised as "other development finance institution" category. Later in March 2019, Government of India asked Life Insurance Corporation to infuse capital in the bank due to high NPA and capital adequacy issues and also asked LIC to manage the bank to meet the regulatory norms. IDBI was put under Prompt corrective action of the RBI and on 10 March 2021 IDBI came out of the PCA. At present direct and indirect shareholding of Government of India in IDBI Bank is approximately 95%, which Government of India (GoI) vide its communication F.No. 8/2/2019-BO-II dated December 17, 2019, has clarified and directed all Central/State Government departments to consider IDBI Bank for allocation of Government Business. Many national institutes find their roots in IDBI like SIDBI, EXIM, National Stock Exchange of India, SEBI, National Securities Depository Limited.

<span class="mw-page-title-main">National Bank for Agriculture and Rural Development</span> Government owned All India Financial Institution and Regulatory Body

The National Bank for Agriculture and Rural Development (NABARD) is an All India Financial Institution (AIFI) and an apex Regulatory Body for overall supervision of Regional Rural Banks, State Cooperative Banks and District Central Cooperative Banks in India. It was established under the NABARD Act 1981 passed by the Parliament of India. It is fully owned by the Department of Financial Services (DFS) under the Ministry of Finance.

Friends of Women's World Banking, India, often shortened to Friends of WWB, India, or just FWWB, is an Indian APEX organization that assists microfinance and microenterprise organizations. Founded in 1982 by Ela Bhatt, it is located in Ahmedabad, Gujarat, India.

<span class="mw-page-title-main">Ministry of Micro, Small and Medium Enterprises</span> Government of India Ministry

The Ministry of Micro, Small and Medium Enterprises is the ministry in the Government of India. It is the apex executive body for the formulation and administration of rules, regulations and laws relating to micro, small and medium enterprises in India. The Minister of Micro, Small and Medium Enterprises is Narayan Rane.

IDFC Bharat Ltd is a microfinance bank, operating in the Tamil Nadu area of South India. Since 1993, it has provided small loans to women without access to formal credit and who typically have daily incomes of less than INR 80 (US$2) per day.

TransUnion CIBIL Limited is a credit information company operating in India. It maintains credit files on 600 million individuals and 32 million businesses. TransUnion is one of four credit bureaus operating in India and is part of TransUnion, an American multinational group.

All India Financial Institutions (AIFI) is a group composed of financial regulatory bodies that play a pivotal role in the financial markets. Also known as "financial instruments", the financial institutions assist in the proper allocation of resources, sourcing from businesses that have a surplus and distributing to others who have deficits - this also assists with ensuring the continued circulation of money in the economy. Possibly of greatest significance, the financial institutions act as an intermediary between borrowers and final lenders, providing safety and liquidity. This process subsequently ensures earnings on the investments and savings involved. In Post-Independence India, people were encouraged to increase savings, a tactic intended to provide funds for investment by the Indian government. However, there was a huge gap between the supply of savings and demand for the investment opportunities in the country.

SMERA, widely known as ‘The SME Rating Agency’, is a credit rating agency in India that provides credit ratings primarily of small and medium-sized enterprises.

The SIDBI foundation for Microcredit (SFMC)

<span class="mw-page-title-main">National Small Industries Corporation</span> Government of India Enterprise to promote and aid small companies (Founded 1955)

National Small Industries Corporation Limited (NSIC) is a Mini Ratna government agency established by the Ministry of Micro, Small and Medium Enterprises, Government of India in 1955 It falls under Ministry of Micro, Small & Medium Enterprises of India. NSIC is the nodal office for several schemes of Ministry of MSME such as Performance & Credit Rating, Single Point Registration, MSME Databank, National SC ST Hub, etc.

<span class="mw-page-title-main">Sankar Chakraborti</span> An expert in credit ratings, ESG assessments and Indias MSME sector

Sankar Chakraborti is the Group Chief Executive Officer of Acuité Ratings & Research Limited, a credit rating agency, accredited by Reserve Bank of India as an External Credit Assessment Institution under New Capital Adequacy Framework, and registered with Securities and Exchange Board of India,. He is also the Chairman of SMERA Ratings Private Limited, and Chairman of ESG Risk Assessments & Insights Limited, India's first ESG Rating Agency.

Bandhan Bank Ltd. is a banking and financial services company, headquartered in Kolkata. Bandhan Bank is present in 35 out of 36 states and union territories of India, with 6,250 banking outlets and 3.26 crore customers. Having received the universal banking licence from the Reserve Bank of India, Bandhan Bank started operations on August 23, 2015, with 501 branches, 50 ATMs and 2,022 Banking Units (BUs). The Bank has mobilised deposits of ₹1,17,422 crore and its total advances stand at ₹1,15,940 crore as of December 31, 2023.

Micro Units Development and Refinance Agency Bank ) is a public sector financial institution in India. It provides loans at low rates to micro-finance institutions and non-banking financial institutions which then provide credit to MSMEs. It was launched by Prime Minister Narendra Modi on 8 April 2015.

Dr. Sailendra Narain is a development finance specialist born in Nawadah, Bihar Province, India. For over 40 years, Narain has been a pioneer in developing the global SME sector. His specialities include: designing policy frameworks for SME Growth, establishing SME financing programs in banking and development financial institutions, and capacity building for SMEs with a focus on Entrepreneurship.

<span class="mw-page-title-main">V. Vaidyanathan</span> Indian Businessman

V. Vaidyanathan is an Indian banker who is the Managing Director and Chief Executive Officer (CEO) of IDFC First Bank, formed after the merger of IDFC Bank and Capital First. Prior to assuming this role, he held the position of Chief Executive Officer at ICICI Prudential Life Insurance and was a member of the Board of Governors at ICICI Bank since 2006.

Financial technology is an industry composed of companies that use technology to offer financial services. These companies operate in insurance, asset management and payment, and numerous other industries. FinTech has emerged as a relatively new industry in India in the past few years. The Indian market has witnessed massive investments in various sectors adopting FinTech, which has been driven partly by the robust and effective government reforms that are pushing the country towards a digital economy. It has also been aided by the growing internet and smartphone penetration, leading to the adoption of digital technologies and the rise of FinTech in the country

Capital First Ltd. was an Indian non-bank financial institution providing debt financing to small entrepreneurs, MSMEs and Indian consumers. Capital First was founded in 2012 by V. Vaidyanathan.

References

  1. ↑ . Accessed December 2020.
  2. ↑ https://legislative.gov.in/sites/default/files/A1989-39.pdf [ bare URL PDF ]
  3. ↑ "Small Industries Development Bank of India(SIDBI) | Department of Financial Services | Ministry of Finance | Government of India". Financialservices.gov.in. Retrieved 14 October 2018.
  4. ↑ "Reserve Bank of India - Publications". Rbi.org.in. Retrieved 14 October 2018.
  5. ↑ "IDFC". www.idfc.org.
  6. ↑ "SIDBI's Financial Inclusion Program covers 'Poorest of the Poor' - ADFIAP".
  7. ↑ "Poorest States Inclusive Growth Programme - SIDBI UKAID DFID RFP". indiamicrofinance.com. 5 November 2022.
  8. ↑ "Establishment of Fund of Funds for funding support to Start-ups". pib.nic.in.
  9. ↑ "Shareholding :: Small Industries Development Bank of India". www.sidbi.in.
  10. ↑ "Fixed Deposits, MSME borrowing becomes easier in Indian Overseas Bank; here's how". Zee Business. 7 April 2018. Retrieved 17 March 2023.
  11. ↑ Gupta, Komal (3 February 2018). "Jaitley launches CriSidEx, says economy witnessing a phase of consolidation".
  12. ↑ "CRISIL, SIDBI Launch India's First MSE Sentiment Index". pib.nic.in.
  13. ↑ "MSME's most attractive segment in commercial credit with fastest growth, low NPAs: Report". The Economic Times. 12 March 2018.
  14. ↑ "Udyami Mitra Portal".
  15. ↑ Network, Knn India - Knowledge & News. "SIDBI launches 'Udyami Mitra' portal to improve accessibility of credit for MSMEs". knnindia.co.in.
  16. ↑ "Sidbi, CSC partner to offer MSMEs better credit access". Press Trust of India. 6 March 2018 – via Business Standard.
  17. 1 2 3 4 "Small Industries Development Bank of India(SIDBI) | Department of Financial Services | Ministry of Finance | Government of India". financialservices.gov.in. Retrieved 17 February 2018.
  18. ↑ "Guidelines for setting up of and operating the Trade Receivables Discounting System (TReDS)" (PDF). Guidelines for Setting up of and Operating the Trade Receivables Discounting System (TReDS).
  19. ↑ "Acuité Ratings & Research". www.acuite.in.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.