CHAPTER 5- CONCLUSION

CONCLUSION

The main objective of SIDBI is to provide financial assistance to all SSI s throughout India through SFC s and SSIDC s. SIDBI s motive is promoting industrial development in India, it emphasizes on the development of the small-scale industries not to earn much profits. The maximum shares of profits of SIDBI are transferred to reserves. It can have more debt capital, hence the large portion of profits are utilized for the payment of interest to long-term securities.

The activities of SIDBI, as they have evolved over the period of time, now meet almost all the requirements of small scale industries which fall into a wide spectrum constituting modern and technologically superior units at one end and traditional units at the other.

Case Study on SIDBI A Successful Financial Institution in SME Financing

Worldwide, the wind has been changing in the finance sector in general and banking-investment sector in particular. Such a panorama teaches us that now, is the time of cooperation rather than a competition, now its a time of convergence rather than cutting each others neck over customers and markets, now its a time of consolidation rather than antagonism. Curing the fatal disease requires the doses of small pills; impressive thoughts come out from the small brain, similarly, India requires prominence of small and medium enterprises for curing its problem of low economic growth vis--vis developed nations. To cure the overall disease of lack of appropriate growth of Indian SMEs Small and Medium Enterprises, India needs several small pills such as adequate credit delivery to SMEs, better risk management, technological up gradation of Banks esp. Public Sector Banks, attitudinal change in Bankers and so on. Among them, the major problem of inadequate financing to SMEs needs an urgent attention. Having said this, it is pertinent to mention that Small Industrial Development Bank of India has achieved landmark results in the domain of small and medium enterprise financing and fulfilling their credit requirements time to time in various forms such as long term project finance, working capital finance, bill discounting etc. However considering the level of appetite for credit facilities of Indian small and medium enterprises, private and public sector banks in India need to work out an unique and innovative model of financing to this vital sector (SME) of Indian Economy. In todays changing world, retail trading, SME financing, rural credit and overseas operations are the major growth drivers for Indian banking industry. The scene has changed since the adoption of financial sector restructuring programme in 1991. The reform in the financial sector in India along with the overall second generation economic reforms in Indian economy has transformed the landscape of banking industry and financial institutions. GDP growth in the 10 years after reforms averaged around 6 %.

With the introduction of the reforms especially in financial sector and successful implementation of them resulted into the marked improvement in the financial health of the commercial banks measured in terms of capital adequacy, profitability, asset quality and provisioning for the doubtful losses.

APPENDIX QUESTIONNAIRE

 Questions asked to manager

Q1) What is SIDBI? Q2) When was SIDBI established? Q3)Business domain of SIDBI? Q4) SIDBI among top 30 bank of the world? Q5) mission Q6) vision Q7) What are the objectives of SIDBI? Q8) Shareholding? Q9) What role SIDBI plays in Small Scale Industries Sector? Q10) Do you think SIDBI faces competition? Q11) What is the interest rate charged?

ARTICLES OF SIDBI

TNN Jun 8, 2009, 12.36 am IST

SIDBI gets $400 mn World Bank loan

NEW DELHI: Small Industries Development Bank of India (SIDBI) has procured a loan of $400 million from the World Bank to assist small and medium enterprises (SMEs) that are reeling under severe credit crunch and high rate of interest. The government's effort to bring down lending rates to be affordable for the SME sector has failed till now. A recent survey of 300 units having turnover between Rs 1 crore and Rs 40,000 crore had revealed that besides the SME sector, even bigger industries were facing problems securing easy loans. The fact-finding report, prepared by Ficci, had disclosed that credit was available at 12% and above despite the government having urged commercial banks to lend at affordable rates.

IANS Sep 16, 2011, 11.32 am IST

SIDBI working with NSE to set up separate SME exchange

KOLKATA: The Small Industries Development Bank of India (SIDBI) is working with the National Stock Exchange (NSE) to set up a separate exchange for small and medium enterprises (SMEs) which will be launched shortly. "It will be a separate exchange within the NSE. It is likely to be operational in this financial year...may be another two months or three," SIDBI Chairman and Managing Director S. Muhnot told reporters here Thursday. The SMEs would be able to raise equity from the market through the exchange and develop their business, he added. "The international venture funds, which are not coming to the MSME (Micro, Small and Medium Enterprises) sector today, will also come in the sector," he said.

Posted: Friday, Jun 24, 2011 at 11:30 am

Sidbi crosses rs2 lakh crore in cumulative disbursement : The Small Industries Development Bank of India (SIDBI) Friday said that it has crossed the milestone of cumulative disbursement of Rs 2 lakh crore as on March 31, 2011. During 2010-11, SIDBI's outstanding credit to the MSME sector increased by 22 per cent to Rs 46,331 crore. Its asset portfolio crossed Rs 50,000 crore as at March 31, 2011. The net profit after tax increased by 22 per cent to Rs 514 crore from Rs 421 crore. The net worth of the Bank increased to Rs 5,979 crore and the Earnings per share (EPS) improved to Rs 11.42 from Rs 9.36. Net NPA as percentage of the total outstanding stood at 0.28 per cent as on March 31, 2011, reflecting strong monitoring, persistent follow-up and timely action by the Bank, besides adequate provisioning. SIDBI remains wholly committed to the development of the MSME sector by way of meeting its various credit and non-credit needs, SIDBI's Chairman and Managing Director, Sushil Muhnot told shareholders at the 13th Annual General Meeting held at Lucknow today. The bank has crossed the milestone of cumulative disbursement of Rs 2 lakh crore as on March 31, 2011 benefiting more than 325 lakh people, he said. The Bank, along with National Stock Exchange, Indian Private Equity and Venture Capital Association (IVCA) and leading angel networks in India, also set up an India Venture Board (IVB), an e-platform for taking the Venture Capital culture in the MSME sector. Going further, the Bank is setting up the SME Exchange with NSE to enable access to capital markets for SMEs, in addition to giving a boost to venture capital industry, Muhnot said

The Economic Times Mumbai: 2011 Jul 04

SIDBI s credit to MSME grows by 22%

THE SMALL Industries Development Bank of India's (SIDBI) outstanding credit to the MSME sector increased by 22% to touch 46,331 crores in the financial year 2010-11 and the bank aims to grow this segment by another 35% in the current fiscal year. Chairman and Managing Director, SIDBI, Sushil Muhnot said that the interest rate rise would have some effect on the MSME sector but he was confident that SIDBI's target for the current fiscal would be achievable. He said that the overall growth in the MSME sector besides their plans to cater to the requirement of equity by MSME's would enable SIDBI to achieve its growth target. SIDBI had achieved the milestone of cumulative disbursement of Rs 2 lakh crores at the end of March 2011, and the bank expects to grow by 18-20% in the current fiscal, Sushil Muhnot said at the 13th annual general meeting of the bank on Friday. He said that the micro small and medium enterprises (MSME) sector has avenues to raise debt but when it come to raising equity they face a problem. SIDBI would also set up an SME exchange with the National Stock Exchange for providing small and medium companies easy access to capital markets. They have already received the approval of SEBI to set up the exchange, which would start functioning in the current fiscal. Sushil Muhnot said that SIDBI's profit after tax increased by 22% to 514 crores in 2010-11 from 421 crores in 2009-10. The asset portfolio crossed Rs 50,000 crores as on March 2011. With the net worth of the bank increasing to Rs 5,979 crores and the Earnings per Share (EPS) improving to Rs 11.42 in 2010-11 from 9.36 in the previous fiscal, the bank AGM approved a dividend payment of 25% for fiscal year 2010-11. SIDBI would also be launching its venture capital fund called India Opportunities Fund of Rs 1,000 crores for which they have already received commitments to thetuune of Rs 500 crore said Sushil Muhno.

BIBLIOGRAPHY

BOOK REFRNSES
Banking Author :N.T. Somashekar Publication :New age international publisher Financial Services Management Author :Deepak Abhyankar Publication :Vipul Prakashan Small and medium enterprises in India Author :Indian Institutions of banking and finance Publication :Taxmann Publications

MAGAZINE REFRENSES OPTIMISM

A bi-monthly magazine dedicated to the Micro, Small and Medium Enterprises

NEWS PAPER REFRENSES

THE TIMES OF INDIA THE FINANCIAL EXPRESS THE ECONOMIC TIMES

INTERNET REFRENSES
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