Small Industries Development Bank Of
India (SIDBI)

Small Industries Development Bank Of
India (SIDBI)

With a view to ensuring larger flow of financial and non-financial assistance to the small-scale sector, the Government of India set up the Small Industries Development Bank of India (SIDBI) under a special Act of the Parliament in October 1989 as a wholly-owned subsidiary of the IDBI.

The Bank commenced its operations from April 2, 1990 with its head office in Lucknow. The SIDBI has taken over the outstanding portfolio of the IDBI relating to the small-scale sector worth over Rs.4,000 crores. The authorised capital of SIDBI is Rs: 250 crores with an enabling provision to increase it to Rs. 1,000 crores.

The important functions of SIDBI are as follows:

(1) To initiate steps for technological upgradation 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 Corporations, 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 upgradation/modernisation and refinance for resettlement of voluntarily retired workers of NTC.

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 Industries Corporation for providing leasing, hire purchase and marketing support to the industrial units in the small-scale sector.

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