Small Industries Development Bank of India (SIDBI)

Small Industries Development Bank of India (SIDBI) is an independent financial institution aimed at aiding the growth and development of Micro, Small and Medium Enterprises (MSMEs) which contribute significantly to the national economy in terms of production, employment and exports.

• SIDBI was established with the mission of facilitating and strengthening the flow of credit to Micro, Small and Medium Enterprises and for addressing the developmental and financial gaps in the ecosystem of MSMEs.
• It is a statutory body set up under an act of the Indian Parliament in 1990.

Functions of SIDBI

• It aims at emerging as a single-window to meet the developmental and financial needs of MSMEs in order to make them globally competitive, strong, vibrant and to protect the institution as a customer-friendly financial body. 
• It also aims at enhancing the wealth of shareholders through the modern technology platform.
• It is involved in the promotion and development of the MSME sector.
• It is the principal institution for the development, promotion and financing of the MSME sector and for coordination of functions of the institutions engaged in similar activities.
• SIDBI retained its position in the top 30 Development Banks of the World in the ranking of The Banker, London.
• SIDBI also functions as a Nodal/Implementing Agency to various ministries of the Government of India viz., Ministry of MSME, Ministry of Textiles, Ministry of Commerce and Industry, Ministry of Food Processing and Industry, etc.

Financial Support of SIDBI to MSMEs

SIDBI provides financial support to MSMEs in the following ways:

1. Indirect financing by way of refinancing the banks, refinancing financial institutions for onward lending to MSMEs.
2. Direct financing by way of service sector financing, receivable financing, risk capital and sustainable financing, etc.

Apart from providing financial assistance, SIDBI focuses on the “credit plus approach” under which it facilitates technology modernization & up-gradation, cluster development, enterprise development, upgrading the skills and support marketing activities.

When was SIDBI Established?

SIDBI was set up on 2nd April 1990. It acts as the Principal Financial Institution for Promotion, Financing and Development of the Micro, Small and Medium Enterprise (MSME) sector.

Is SIDBI a statutory body?

SIDBI was established as a statutory body in 1990, under an Act of the Indian Parliament.

National Housing Bank (NHB)

The full form of NHB is the National Housing Bank. NHB is an agency owned by the Indian Government and was established under the National Housing Bank Act, 1987, on 9 July 1988. The main major bank for housing is the NHB. The NHB was formed with the goal of facilitating as a positive influence to support regional and local housing finance agencies as well as provide additional financial support to certain entities and for related matters.

The National Housing Bank Act, 1987 has been amended by the Finance Act, 2019. The amendment confers upon the RBI the powers of supervision of HFCs (Housing Finance Companies). HFCs are registered and supervised by the NHB, supervised with on-site and off-site frameworks and coordinated with the other regulators.

The main goal of NHB

NHB was formed to accomplish the specific goals which are

• Promoting a sound, safe, sustainable and cost-effective mortgage lending framework to appeal to all sections of the population and integrating the housing finance sector with the banking markets overall.
• Promoting a network of specialized housing finance institutions to represent the various areas and different income classes appropriately.
• To increase the sector’s wealth and turn them towards housing.
• To offer loans for housing more reasonably priced.
• Focused on the supervisory and regulatory authority derived under the Act, to control the activities of housing finance companies.
• To support an increase in the availability of buildable land or building materials for homes and to develop the national housing stocks.
• To allow public authorities, for homes, to develop as mediators and providers of maintained property.

National Bank for Agriculture and Rural Development (NABARD)

NABARD is India’s apex development bank – National Bank for Agriculture and Rural Development.

With headquarters in Mumbai, NABARD has branches across India.

In the year 1982, CRAFICARD or the Committee to Review Arrangements of Institutional Credit for Agriculture and Rural Development recommended the establishment of a developmental bank and accordingly, NABARD was set up. 

It was formed by a special Parliamentary Act. The chief focus of the organization was the advancement of rural India by enhancing the flow of credit for the up-liftment of agriculture as well as the rural non-agricultural sector. 

Functions of NABARD

The functions of NABARD are described below.

• In order to build an empowered and financially inclusive rural India, NABARD has specific departments that work towards the desired goals. These departments can be collectively categorized into three majors units:
  • Financial
  • Developmental
  • Supervision
• The financial support necessary to build rural infrastructure is provided by NABARD.
• Preparation of district-level credit plans by NABARD are used to guide and motivate the banking industry to achieve required targets. 
• NABARD also supervises the Regional Rural Banks (RRBs) and Cooperative Banks along with developing their banking practices and integrating them to the Core Banking Solution (CBS) platform.

• NABARD also helps handicraft artisans sell their products by training and providing a marketing platform for them.
  • NABARD has partnered with various leading global organisations and institutions affiliated with the World Bank that have played a role in transforming agriculture.
  • It offers advisory services and financial assistance provided by these international partners to help in consultation with rural development and other agricultural practices.

Important Contributions of NABARD

EXIM Bank or Export-Import Bank of India

EXIM Bank or Export-Import Bank of India is India’s leading export financing institute that engages in integrating foreign trade and investment with the country’s economic growth.

Founded in 1982 by the Government of India, EXIM Bank is a wholly-owned subsidiary of the Indian Government.

The current Managing Director is David Rasquinha.

It is headquartered in Mumbai, Maharashtra.

EXIM Bank Foundation

The organization was established in 1982 under the Export-Import Bank of India Act 1981 as a purveyor of export credit. R.C. Shah was the bank’s first Chairman and Managing Director.

Latest Context related to EXIM Bank –

The government of India has decided to infuse Rs 1,500 crore capital into the state-owned Export-Import Bank of India in the next financial year. The amount is Rs 200 crores higher than the provision made by the Government for the current fiscal. The government has earmarked Rs 1,300 crores capital infusion for the bank.

The capital infusion will give an impetus to new initiatives such as supporting the Indian textile industry, the country’s active foreign policies, changes in the concessional finance scheme, etc.

EXIM Bank Functions

The bank’s functions can be grouped under products and services. They are discussed briefly below:

Financial Products

• Buyer’s credit – it is a credit facility program that encourages Indian exporters to explore new regions across the globe. It also facilitates exports for SMEs by offering credit to overseas buyers to import goods from India.
• Corporate banking – it offers a variety of financing programs to augment the export-competitiveness of Indian companies.
• Lines of credit – it offers extended a line of credit to Indian exporters to help them expand to new geographies and uses a line of credit as an effective market-entry tool.
• Overseas investment finance – it offers term loans to Indian companies for equity investments in their overseas joint ventures or wholly-owned subsidiaries.
• Project exports – encourages project exports from India and helps Indian companies secure contracts abroad.

Services

• Marketing advisory services – help Indian exporters in their globalization ventures by assisting in locating overseas distributors/partners, etc. Also, assists in identifying opportunities abroad for setting up plant projects or acquiring companies.
• Research and analysis – conducts research in the field of international economics, trade and investment, country profiles to identify risks, etc.
• Export advisory services – it offers information, advisory, and support services enabling exporters to evaluate international risks, exploit export opportunities and improve competitiveness.
• Term deposit scheme

Is EXIM bank regulated by RBI?

Yes, it is regulated by RBI. The Bank primarily lends for exports from India including supporting overseas buyers and Indian suppliers for export of developmental and infrastructure projects, equipment, goods and services from India.

Who owns EXIM bank?

Exim Bank is fully owned by the Government of India.