Banking and financial institition, SIDBI,SFC and SIICs

2. 02
03
01 SIDBI
SFCs
SIICs

3. intro
missio
n
vision
objecti
ve
functio
n
success
01 SIDBI

4. intro
missio
n
vision
objecti
ve
functio
n
success • The Government of India set up the SIDBI under the special Act of
the Parliament in October 1989.
• SIDBI commenced its operations from April 2, 1990 with its head
office in Lucknow.
• SIDBI has 73 branches and 5 regional offices across the country.
• SIDBI has been set up as a wholly owned subsidiary of IDBI
(Industrial Development Bank Of India).
• Its authorized capital is 1000 crore comprising equity capital of Rs.
750 crore and preference share of Rs. 250 crore.
• It has been Established with a issued capital of 450 crore.
• It is the Apex Institution which overseas, co-odinates and further
strengthens various arrangement for providing financial and non
financial assistances to small scale, Tiny and cottage Industries.

5. intro
missio
n
vision
objecti
ve
functio
n
success
• Mission:
“To empower the Micro, Small & Medium Enterprises(MSME)
sector with view to contributing to the process of economic growth,
employment generation and balance regional development.”

6. intro
missio
n
ā
vision
objecti
ve
functio
n
success
• 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 heighest corporate values through modern technology platform.”

7. intro
missio
n
ā
vision
objecti
ve
functio
n
success
Objective
1
Financing
Objective
2
Promotion
Objective
3
Development
Objective
4
coordination
For orderly growth of industry in the small scale sector. The Charter has
provided SIDBI considerable flexibility in adopting appropriate operational
strategies to meet these objectives.

8. intro
missio
n
ā
vision
objecti
ve
functio
n
success
• SIDBI refinance loans and advances to Small Scale Industrial
Units and also provide sources support to them.
• SIDBI grant direct assistance as well as refinance loan for
financing export of products manufactured by Industrial concerns
in the Small Scale Sectors.
• SIDBI provides services like leasing, factoring etc. to industrial
concerns in Small Scale Sectors.
• SIDBI extends financial support to State Small Industries
Development Corporation (SSIDCs) for providing source raw
materials to and marketing the end products of Industrial units in
Small Scale Units.
• SIDBI provides support to National Small Industries Corporation
(NSIC) for providing leasing, hire-purchase, and marketing
support to industrial units in the Small Scale Units.

9. intro
missio
n
ā
vision
objecti
ve
functio
n
success
• SIDBI retained its position in the top 30 Development Banks of the
World in the latest ranking of the Banker, London.
• As per the May 2001 issue of the Banker, London, SIDBI ranked 25th
both in terms of Capital and Asset.
• Credit Guarantee Fund Trust for Micro and Small Enterprises
popularly known as CGTMSE is widely being used by many PSU
Banks and Private Sector Banks to fund MSME sector.
• During the year 2002-03 the aggregate sanction and Disbursement of
SIDBI amounted to Rs. 10904 crore and Rs. 6789 crore respectively.

10. Direct Finance1 Direct Finance
Direct Finance
Direct Finance
Direct Finance
Direct Finance
Direct Finance
Direct Finance
Direct Finance
Direct Finance
2
3
4
9
8
7
5
6
Bills Finance
Re-Finance
International Finance
Promotional & Development
activities
Fixed Deposits Schemes
Seed Money Schemes
Venture Capital Fund
Schemes
National Equity Fund Scheme
Product
service
&

11. 43.62%
Others
15.4%
Government
Of India
10%
NABARD
14.25%
LIC
16.73%
State Bank of
India
Rs.
Subsidiary

12. intro
Financial
resources
functio
n
Prohibite
d
function
Objectiv
e
workin
g 02SFCs

13. intro
Financial
resources
functio
n
Prohibite
d
function
objecti
ve
workin
g
 A Central Industrial Finance Corporation was set up under the
Industrial Finance Corporations Act. 1948 in order to provide medium
and long term credit to Industrial credit to Industrial undertakings
which fall outside normal activities of commercial Banks.
 The state governments expressed their desire that similar corporations
be set up in states to supplement the work of the Industrial Finance
Corporation.
 State government also expressed that the state corporations be
established under a special statue in order to make it possible to
incorporate in the constitutions necessary provisions in regard to
majority control by the government, guaranteed by the state
government in regard to payment principal.
 In order to implement the views expressed by the state governments
the State Financial Corporation bill was introduced in the parliament.

14. intro
Financial
resources
functio
n
Prohibite
d
function
objecti
ve
workin
g
The SFCs mobilize their financial resources from the following
sources :
• Their own share Capital
• Income from Investment and repayment of loan.
• Sale of Bonds.
• Loans from the IDBI (to some extent)
• Borrowing from the Reserve Bank of India.
• Deposites from the public
• Loans form the State Government.

15. intro
Financial
resources
ā
functio
n
Prohibite
d
function
objecti
ve
workin
g • The SFCs grant loans mainly for acquisition of fixed assets like
land, building, plant and machinery.
• The SFCs provide financial assistance to industrial units whose
paid-up capital and reserves do not exceed Rs. 3 crore (or such
higher limit up to Rs. 30 crore as may be specified by the
central government).
• The SFCs underwrite new stocks, shares, debentures etc., of
industrial concerns.
• The SFCs provide guarantee loans raised in the capital market
by scheduled banks, industrial concerns, and state co-operative
banks to be repayable within 20 years.

16. intro
Financial
resources
functio
n
Prohibite
d
function
objecti
ve
workin
g
 Not to give loans to an Industrial unit exceeding 10% of its
paid-up capital or RS. 60000 whichever is lower.
 Not to accept public deposits for a period exceeding 5 years.
 Not to accept deposits exceeding the paid up capital.
 Not to give loans on the security of its share.
 Not to declare dividend on its shares without sanction of the
Central Government.
 Not to purchase share and stocks directly of an Industrial unit or
limited public company.

17. intro
Financial
resources
functio
n
Prohibite
d
function
Objectiv
e
workin
g
• To establish uniformity in regional industry.
• To provide incentive to new industries.
• To bring efficiency in Regional Industrial Units.
• To provide finance to small scale, medium sized and cottage
industries in the state.
• To develop regional financial resources.

18. intro
Financial
resources
functio
n
Prohibite
d
function
Objectiv
e
workin
g
The government of India passed the State Financial Corporation Act in
1951 and made it applicable to all the States. The authorised Capital of a
State Financial Corporation is fixed by the State government within the
minimum and maximum limits of Rs. 50 lakh and Rs. 5 crore and is
divided into shares of equal value which were taken by the respective State
Governments, the Reserve Bank of India, scheduled banks, co-operative
banks, other financial institutions such as insurance companies, investment
trusts and private parties.
The shares are guaranteed by the State Government. The SFCs can
augment its fund through issue and sale of bonds and debentures, which
should not exceed five times the capital and reserves at Rs. 10 Lakh.

19. intro
objective
functio
n
Work
performan
ce 03 SIICs

20. intro
objective
functio
n
Work
performan
ce  State Industrial Investment Corporations (SIICs) also known as
State Industrial Development Corporations (SIDCs) were set
up under company Act, 1956.
 SIICs were set up as a wholly owned state government
undertakings for promotion and development of medium and
large industries.
 At present there are approx. 29 SIICs functioning in India.
 SIICs are not merely financing agencies, but are intended to act
as instruments for accelerating the pace of Industrialization in
respective states.
 SIICs were set up mainly to cater to the financial requirenment
of medium and large scale industries.

21. intro
objective
functio
n
Work
performan
ce
• To liaise with and to represent to the Central and State
Governments, term lending and other financial institutions on the
common problems and issues of member corporations
• To promote co-ordination, collaboration, joint participation and
general understanding among the member corporations etc.
• To render assistance to member corporations in their efforts to
improve efficiency of operations of their assisted and sponsored
units.
• To organize common service facilities, training courses, seminars,
meetings and study tours for the benefit of the member
corporations.
• To sponsor studies, surveys, research and development projects
pertaining to industries.
• To establish and maintain at the Registered Office a commercial
and technical library and information Centre for use of member
corporations.

22. intro
objective
function
Work
performan
ce • SIICs provide financial assistance to private and cooperative
sectors for establishment, expansion and modernisation of
industrial enterprises.
• It develop infrastructural facilities so that new industrial
enterprises may be promoted.
• It identify and develop industrial areas for the establishment
of industrial enterprises.
• It make necessary arrangement for providing
entrepreneurship training to new entrant.
• SIICs promote and manage new industrial units particularly
in backward areas.

23. intro
objective
functio
n
Work
performanc
e
0
500
1000
1500
2000
2500
1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2003-04
Financial Assistance Sanctioned and Disbursed by SIICs Ltd.
Amount Sanctioned (Rs.) Amount Disbursed (Rs.)