History of Small Industries Development Bank of India

Please provide me the details of the Small Industries Development Bank of India as well as some of the main functions of the Bank?

[Kiran Chandar]

Small Industries Development Bank of India (SIDBI), founded on April 2, 1990 under an Act of Indian Parliament, is the Principal Financial Institution for the Promotion, Financing and Development of the Micro, Small and Medium Enterprise (MSME) sector and for Co-ordination of the functions of the institutions engaged in similar activities.

The business domain of SIDBI comprises of Micro, Small and Medium Enterprises (MSMEs), which contribute significantly to the national economy in terms of production, employment and exports.

SIDBI has retained its position in the top 30 Development Banks of the World in the ranking of The Banker, London. As per the May 2001 issue of The Banker, London, SIDBI has been ranked 25th both in terms of Capital and Assets.

SIDBI offers assistance to the small-scale industries sector in the country through the existing banking as well as other financial institutions, such as, State Financial Corporations, State Industrial Development Corporations, commercial banks, cooperative banks and RRBs. etc.

The major functions of SIDBI are given below:

(i) It refinances loans as well as advances provided by the existing lending institutions to the small-scale units.
(ii) It discounts and rediscounts bills arising from sale of equipment to and manufactured by small-scale industrial units.
(iii) It extends seed capital/soft loan assistance beneath National Equity Fund, Mahila Udyam Nidhi and Mahila Vikas Nidhi and seed capital schemes.
(iv) It grants direct support and refinance loans extended by primary lending institutions for financing exports of products manufactured by small-scale units.
(v) It provides services like factoring, leasing, etc. to small units.
(vi) It extends financial sustain to State Small Industries Corporations for providing scant raw materials to and marketing the products of the small-scale units.
(vii) It offers financial support to National Small Industries Corporation for providing; leasing, hire pur¬chase and marketing help to the small-scale units.