Project :- banking

Topic :- SIDBI AND IDBI

Group no. :- 10

Name :-
Kanezzfatema -2206071
Aenisha. -2206072
Aayushi. -2206073
Nandini. - 2206074
Nimita. -2206075
Apexa. -2206076
Urvi -2206078

SIDBI

About sidbi
 Small Industries Development Bank of India (SIDBI) is the apex regulatory body for
overall licensing and regulation of micro, small and medium enterprise finance
companies in India.
 It is under the jurisdiction of Ministry of Finance , Government of India headquartered at
Lucknow and having its offices all over the country.
 The SIDBI was established on April 2, 1990, by Government of India, as a wholly owned
subsidiary of IDBI Bank .
 It was delinked from IDBI w.e.f. March 27, 2000.
 Its purpose is to provide refinance facilities to banks and financial institutions and engage
in term lending and working capital finance to industries, and serves as the principal
financial institution in the Micro, Small and Medium Enterprises (MSME) sector.
 SIDBI also coordinates the functions of institutions engaged in similar activities.
 It was established in 1990,through an Act of Parliament.
History of sidbi

 SIDBI, which stands for Small Industries Development Bank of India, is a financial
institution in India that was established in 1990.
 Its main objective is to provide financial support and development assistance to small and
medium-sized enterprises (SMEs) in the country.
 SIDBI plays a crucial role in promoting entrepreneurship and fostering economic growth
by offering various financial products and services tailored to the needs of SMEs.
 It has been instrumental in supporting the growth and development of small businesses
across different sectors in India.
 It was set up under an Act of Parliament in 1990 and is headquartered in Lucknow, Uttar
Pradesh.
 SIDBI’s primary focus is on financing and development activities for small-scale
industries.
 It offers various loan schemes, credit facilities, and venture capital assistance to help
SMEs thrive.
 SIDBI also collaborates with other financial institutions and organizations to promote
entrepreneurship and provide technical support to small businesses.

Function of sidbi

functions of SIDBI SIDBI performs several important functions to support small and
medium-sized enterprises (SMEs) in India. Here are some of its key functions:

1. Financing: SIDBI provides financial assistance to SMEs through various loan

schemes, credit facilities, and refinancing options. It helps SMEs access the capital
they need to start, expand, and sustain their businesses.

2. Refinancing: SIDBI acts as a refinancing institution for banks and other financial
institutions. It refinances loans provided by these institutions to SMEs, helping to
increase the availability of credit for small businesses.

3. Development Support: SIDBI offers developmental support to SMEs by providing

technical and managerial guidance, training programs, and capacity-building
initiatives. It helps SMEs enhance their operational efficiency and competitiveness.
 4. Venture Capital: SIDBI, through its venture capital arm SIDBI Venture Capital
Limited (SVCL), provides equity and risk capital to high-potential SMEs. This helps
in promoting innovation, scaling up businesses, and supporting entrepreneurial
ventures.

5. Promotional Activities: SIDBI undertakes various promotional activities to encourage

entrepreneurship and the growth of SMEs. It collaborates with other institutions,
government agencies, and industry associations to create a conducive environment for
small businesses.

6. Policy Advocacy: SIDBI plays an active role in advocating policies and reforms that
support the interests of SMEs. It represents the concerns and needs of SMEs to
policymakers and works towards creating a favorable policy environment for their
growth.

These functions of SIDBI contribute to the development and sustainability of SMEs,

fostering economic growth and job creation.

Role of sidbi

SIDBI plays a crucial role in supporting the growth and development of small and
medium-sized enterprises (SMEs) in India. Its role can be summarized as follows:

1. Financial Support: SIDBI provides financial assistance to SMEs through various loan
schemes, credit facilities, and refinancing options. It helps bridge the funding gap and
ensures access to capital for small businesses.

2. Development Assistance: SIDBI offers developmental support to SMEs by providing

technical and managerial guidance, training programs, and capacity-building
initiatives. This helps enhance the overall competitiveness and sustainability of small
businesses.
 3. Promoting Entrepreneurship: SIDBI promotes entrepreneurship by encouraging the
establishment of new SMEs and supporting existing ones. It fosters innovation,
creativity, and job creation in the small business sector.

4. Collaborations and Partnerships: SIDBI collaborates with other financial institutions,

government agencies, and industry associations to create a supportive ecosystem for
SMEs. It works towards creating synergies and leveraging resources to benefit small
businesses.

5. Equity and Risk Capital: Through its venture capital arm, SIDBI Venture Capital
Limited (SVCL), SIDBI provides equity and risk capital to SMEs. This helps in
scaling up businesses and supporting high-potential ventures.

Overall, SIDBI plays a vital role in providing financial and developmental support to
SMEs, contributing to the growth of the Indian economy.

Objective of sidbi

The main objectives of SIDBI are to promote, finance, and develop small-scale industries
in India. Here are a few key objectives:

1. Financing: SIDBI provides financial assistance to small businesses through various

loan schemes, credit facilities, and refinancing options.

2. Development: It focuses on the overall development of small-scale industries by

offering technical and managerial support, training programs, and capacity-building
initiatives.

3. Promotion: SIDBI promotes entrepreneurship and innovation by encouraging the

establishment of new small businesses and supporting existing ones.

4. Coordination: It collaborates with other financial institutions, government agencies,

and industry associations to create a supportive ecosystem for small businesses.
 5. Equity and Risk Capital: SIDBI also plays a role in providing equity and risk capital
to small businesses through its venture capital arm, SIDBI Venture Capital Limited
(SVCL).

These objectives help in fostering the growth and sustainability of small and medium-
sized enterprises in India.

Mission & Vision

Mission:

“To empower the Micro, Small and Medium Enterprises (MSME) sector with a view to
contributing to the process of economic growth, employment generation and balanced
regional development”

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
shareholder wealth and highest corporate values through modern technology platform”
SIDBI

Business Domain of SIDBI

• The business domain of SIDBI consists of small scale industrial units, which contribute
significantly to the national economy in terms of production, employment and exports.

• Small scale industries are the industrial units in which the investment in plant and
machinery does not exceed Rs.10 million.

• About 3.1 million such units, employing 17.2 million persons account for a share of 36
per cent of India’s exports and 40 per cent of industrial manufacture.
 • In addition, SIDBI’s assistance flows to the transport, health care and tourism sectors
and also to the professional and self-employed persons setting up small-sized
professional ventures.
SIDBI

Products And Services

 Direct finance.
 Bills finance
 Refinance
 International finance
 Promotional & Development activities.
 Fixed deposit scheme
 Technology Upgradation & Modernisation Fund Scheme {TDMF}
 Venture Capital Fund Scheme
 Seed Money Schemes
 National Equity Fund Scheme

 Direct Finance

• Since its beginning, SIDBI had been providing refinance to State Level Finance Corporations /
State Industrial Development Corporations / Banks etc., against their loans granted to small scale
units.
• SIDBI’s direct finance schemes are:
• Scheme for expansion / diversification of small scale units.
• Scheme for specialised marketing agencies.
• Scheme for ancilaring / subcontract units.
• Scheme for existing Export Oriented Units (EOUs) to enable them to acquire ISO 9000 series
certification.

 Promotional and Development Activities

• As an apex financial institution for promotion, financing and development of industry in the
small scale sector, SIDBI meets the varied developmental needs of the Indian SSI sector by its
wide-ranging Promotional and Developmental (P&D) activities.
• The activities are as follows:
• Entrepreneurship Development Programmes.
• Management Development Programmes.
• Technology Upgradation Programme

 International Finance Schemes

• The main objective of the various International Finance schemes is to enable small-scale
industries to raise finance at internationally competitive rates to fulfill their export commitments.
• The financial assistance is being offered in US Dollars and Euro currencies. Assistance in
Rupees is also provided to the needy borrowers.
• The international finance is available from pre-shipment & post shipment credit.
• Need based limit, depending on the normal trade terms and credit period given to overseas
buyers by exporters not exceeding 180 days

 Bills Finance Schemes

• Bills Finance Scheme involves provision of medium and short- term finance for the benefit of
the small-scale sector.
• Bills Finance seeks to provide finance, to manufacturers of indigenous machinery, capital
equipment, components sub- assemblies etc, based on compliance to the various eligibility
criteria, norms etc as applicable to the respective schemes.
• To be eligible under the various bills schemes, one of the parties to the transactions to the
scheme has to be an industrial unit in the small-scale sector within the meaning of Section 2(h)
of the SIDBI Act, 1989.

 Refinance Schemes
• Refinance scheme is introduced for catering to the need of funds of Primary Lending Institutes
{PLI} for financing small scale sector.
• Under the scheme, SIDBI grants refinance against term loans granted by the eligible PLI’s to
industrial concerns for setting up industrial projects in the small scale sector as also for their
expansion/modernization / diversification.
• Schemes of re-finance assistance:
• Scheme for SC-ST & physically handicraft persons
• Composite loan scheme
• Equipment refinance schemes.
• Schemes for small road transport operators.
• Special assistance to ex-servicemen

Achievements

• 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 25 th both in terms of Capital
and Assets.
• 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 disbursements of SIDBI amounted to Rs
10904crore and Rs 6789crore respectively.

Contribution in which sectors and industries

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

Advantages of SIDBI
•Provides skill-up support, entrepreneurial guidance, and technology modernisation in addition
to looking after an MSME player’s funding needs
•To promote the growth of micro and small businesses, SIDBI offers collateral-free loans of up
to ₹1 Crore
•Offers loans to small businesses at attractive interest rates, starting from 8.5% p.a.
•It has an extremely transparent lending process. Plus, it doesn’t impose hidden charges.
 IDBI

ABOUT IDBI
• Industrial development bank of India, was established in 1964 by act of parliament.
• Its headquarter is in Mumbai.
• It is India’s 10th largest bank in the world in terms of reach, with 3350 ATMs, 1853 branches,
including one overseas branch at Dubai, and 1382 centers.
• It is one of 27 commercial banks owned by the Government of India.

 The IDBI has also introduced the single window assistance scheme for grant of term-
loans and working capital assistance to new, tiny and small-scale enterprises.
 As per data available, IDBI has extended about one-third of total industrial assistance to
small-sector alone.
 The main objects of IDBI Bank Limited, inter alia, are as under: To establish and carry on
business of banking in all forms within India and outside India, To finance, promote or
develop industry and assist in the development of Industries.

History of idbi
Industrial Development bank of India (IDBI) was constituted under Industrial
Development bank of India Act, 1964 as a Development Financial Institution (DFI)
and came into being as on July 01, 1964 as a wholly owned subsidiary of RBI. In
1976, the ownership of IDBI was transferred to the Government of India and it was
made the principal financial institution for coordinating the activities of institutions
engaged in financing, promoting and developing industry in India. It was regarded
as a Public Financial Institution in terms of the provisions of Section 4A of the
Companies Act, 1956. It continued to serve as a DFI for 40 years till the year 2004
when it was transformed into a Bank.

Industrial Development Bank of India Limited: In response to the felt need and on
commercial prudence, it was decided to transform IDBI into a Bank. For the
purpose, Industrial Development bank (transfer of undertaking and Repeal) Act,
2003 [Repeal Act] was passed repealing the Industrial Development Bank of India
Act, 1964. In terms of the provisions of the Repeal Act, a new company under the
name of Industrial Development Bank of India Limited (IDBI Ltd.) was
incorporated as a Govt. Company under the Companies Act, 1956 on September
27, 2004. Thereafter, the undertaking of IDBI was transferred to and vested in
IDBI Ltd. With effect from October 01, 2004. In terms of the provisions of the
Repeal Act, IDBI Ltd. Has been functioning as a Bank in addition to its earlier role
of a Financial Institution.

Merger of IDBI Bank Ltd. With IDBI Ltd. : Towards achieving the faster inorganic
growth of the Bank, IDBI Bank Ltd., a wholly owned subsidiary of IDBI Ltd. Was
amalgamated with IDBI Ltd. In terms of the provisions of Section 44A of the
Banking Regulation Act, 1949 providing for voluntary amalgamation of two
banking companies. The merger became effective from April 02, 2005.

Change of name of IDBI Ltd. To IDBI Bank Ltd.: In order that the name of the
Bank truly reflects the functions it is carrying on, the name of the Bank was
changed to IDBI Bank Limited and the new name became effective from May 07,
2008 upon issue of the Fresh Certificate of Incorporation by Registrar of
Companies, Maharashtra. The Bank has been accordingly functioning in its present
name of IDBI Bank Limited.

Narsimham Committee: In order to make the IDBI’s coordinating role more

effective, the Narsimham Committee (1991) has suggested that the IDBI should
give up its direct financing function and perform only promotional apex and
refinancing role in respect of other institutions like SFCs and SIDBI. The direct
lending function should be entrusted to a separate finance company especially set
up for this purpose.

Management
IDBI Bank is a Board-managed organisation. The responsibility for the day-to-day
management of operations of the Bank is vested with the Chairman & Managing
Director, 2 Deputy Managing Directors and 10 Executive Directors.

Subsidiaries of IDBI Bank

IDBI Capital Market Services Limited (ICMS)
IDBI Intech Limited (IIL)
IDBI Asset Management Limited (IAML)
IDBI MF Trustee Company Limited (IMTCL)
DBI Trusteeship Services Ltd (ITSL)

Role of IDBI
As an apex development bank, the IDBI’s major role is to co-ordinate the activities
of other development banks and term-financing institutions in the capital market of
the country.

Providing technical and administrative assistance for promotion, management and

expansion of industry thus performing promotional and development functions.
 Direct Assistance: The IDBI grants loans and advances to industrial
concerns. The bank guarantees loans raised by industrial concerns in the
open market from the State Co-operative Banks, the Scheduled Banks, the
 Industrial Finance Corporation of India (IFCI) and other ‘notified’ financial
institutions.
 Indirect Assistance: Providing refinancing facilities to the IFCI, SFCs and
other financial institutions approved by the government. IDBI subscribes to
the shares and bonds of the financial institutions and thereby provide
supplementary resources.
Coordinating the activities of financial institutions for the promotion and
development of industries.
IDBI is the leader, coordinator and innovator in the field of industrial financing in
our country. Its major activity is confined to financing, developmental, co-
ordination and promotional functions.
Planning, promoting and developing industries with a view to fill the gaps in the
industrial structure by conceiving, preparing and floating new projects.

Objective
The objective of the IDBI includes:
• Coordinating, supervising, and controlling the activities of Finacial Institutions like ICICI, LIC,
etc
• The Collection of resources for other financial institutions and providing financial assistance
• Planning and promoting key industries to enhance industrial growth
• To build a system that adheres to national priorities

Function of idbi
IDBI played a crucial role in the Industrial Development Bank Of India’s Functions are as
follows:
•The promotion and development of the industries to bridge the gaps between the industrial
structure are crucial functions of IDBI
•The preparation and floating of new projects for industrial development is an important activity
performed by the IDBI
•Purchasing shares that are concerned with industries
•The Coordination of activities performed by other financial institutions
•Extension of technical and administrative support for the expansion of industries
•Offering refinancing facilities to the Industrial Finance Corporation of India (IFCI ), Securities
and Futures Commission ( SFC ), and other financial institutions approved by the Government of
India
•The IDBI also aids Foreign Exchange Services. The purchase of currencies, deposits outside the
country, swaps, etc., are also facilitated by the same.

Contribution in different sector and industry

 BANK LTD. Banks extends credit facilities to industries and trade to develop right types
of industry and the business.
 Expansion of credit will provide more funds for the entrepreneurs to start new industries,
which results in more employment and income.
 Commercial banks by providing funds encourage production, and cause an increase of
national income.
 Banks promotes capital formation by means of pooling saving from the people.
 They mobilise the idle and dormant capital of the community provide it for investment.
 Banks also influences the economy by regulating the interest rates in the money market,
by means of regulating the supply of the funds.
 Low rate of interest will tend to stimulus economic activity during the period of
deflation.
 A reserve policy is followed during depression.

PRODUCTS AND SERVICES.

• Suvidha Tax Saving Fixed Deposit.
• Jubliee Plus Account.
. Super Shakti Account.
• Flexi Current Account.
• Sabka Savings Account.
IDBI Capital Market Services Ltd.
IDBI Capital offers a full suite of products and services to Corporate, Institutional and Individual
clients. The range of services include:-

 Investment Banking
 Capital Market Products
 Private Equity
 Corporate Advisory Services
 Mergers & Acquisitions
 Project Appraisals & Debt Syndication
 Stock Broking-Institutional & Retail
 Distribution of Financial Products
 Debt Placement and Underwriting

Mission and vision

Mission:
 Delighting customers with our excellent service and comprehensive suite of best-in-class
financial solutions;
 Touching more people’s lives with our expanding retail footprint while
 Maintaining our excellence on corporate and infrastructure financing; Continuing to act
in an ethical, transparent and responsible manner, becoming the role model for corporate
governance;
 Deploying world class technology, systems and processes to improve business efficiency
and exceed customer’s expectations;
 Encouraging a positive, dynamic and performance-driven work culture to nurture
employees grow them and build a passionate and committed work force;
 Expanding our global presence;
 Relentlessly striving to become a greener bank

VISION
 To be the leading
 Provider of insurance plans
 Adds value to their lives
 “A trans-nationally competitive financial conglomerate of significance to societies and
Pride of India.”
Facilities
• Letter of Credit Issuance.
• Bank Guarantee Issuance.
• Cross Border Fx Remittances
• Pre-shipment Export Finance.

Achievements
1. Awards Won during the year
• IT Team of the Year(2007) Award of IBAS
• Best IT Security Practices Award of NASSCOM
• Best CTO Award of Cyber Media
• Won two special awards, for “Best Payments Initiative” and “Outstanding Achiever of the
Year” (2007)

2. Key Projects
• Airline ticketing through ATMs
• Setup of Data Center and Disaster Recovery Center
• Internet Banking Enabled Multi-Functional KIOSK
• Kolkata and Haldia Port Trust Internet Banking Payment and MIS Modules
• Online Payment of Central Excise & Service Tax

Recommendations

1. Managemem of IDBI is centralised ise it follows the long procedure for approvals of
louns, due to which this should be decentralisel
2. The branches are located only in metropolitan cities so they should increase the mimber
of branches sa. 575 hranches all over the country are not enough
3. Bauk should enchance its business by providing funds to financial institutions those
Engaged in venture capital, hite purchase, leasing, eto
4. Number of working hours of IDBI bank is 7 hours, it should be increased to 12 hours.
5. Alão hink should come up with new schemes specially for the development of Small and
Medium enterprises,
6. Centres providing SMEs products are very less Le SMEs products are available just at 27
centres. Aud hence for the development of SMEs number should be raised
7. There should be facilities such as online acceptance of the form for opening a bank
account
8. Not only that, bank should also come up with some different iustant banking options like
TV banking

Benefits
 Loyalty points with great rewards
 Enhanced access to over 10 lakh VISA & MasterCard ATMs worldwide and 14 million
VISA merchant establishment & 26 million MasterCard merchant establisement
worldwide
 Promotional programmes with exciting prizes
 Zeto Ibat card liability insurance

IDBI 'Super Shakti Account for Women

 Understanding the specific requirements of the customers, we at IDBI Bank hitve
introduced a special Savings Account for Women, which we have coined Super Shakti
Not only titus, along with this account it offer one Zero Balance Savings Account
absolutely free for her child below the age of eighteen years. The Accourtt offers a host of
features, which include
 Free Transactions at other Bank ATM
 An accoum opening balance of just Rs. 1000
 An AQB mquirement of Rs. 5000
 A Zero balance account for your child below the age of 18 years
 Debit Card Free for the first year.
 A free Personalised Customised PAP Cheque Book
 Quarterly Account Statement
 Five Demand Draft at Home Brauch
 Free Payarder for payment of School/collintas foes and remitting funds to their parenta
 Phone Banking
 Mobile Banking
 Free Statetiment by e-mail
 Densat Account at just: Rs.200
 Locker services at a concessional mie
 Investment advisory services.
 Firme local personalized Cheque Book

CONCLUSION

India in well pentioned to become the fourth largest economy in the world by
2025.GEXP growth rates of 7-8% in a year will be sustainable if key enabling factors
have been put in place. One of the robust economic growths is a hanking sector that is
adequately sufficient to meets the needs of growing economy. The shape of banking in
2010 will be the result of interplay between the decisions taken by policy makers and
actions of bank management

As the market conditions remamed under pressure and volatile, growth of the economy is
expected to remain above 82% during FY 2011-12 Such growth inomesitum and the
revival plan would bestow sufficient platform to commercial bankis in under to enlarge
their business level. IDBI Bank is currently well poised in terms of its infrastructure and
policy drections, to play a larger role in the growth story of the economy and optimise its
performance inidicators

IDBI Bank provides complete solation catering to financial requirements of corporate. It

is one among the leaders in project finance The Bank also offers a wide array of
corporate banking products. Bank has achieved impressive growth of more than 80% in
Trade Finance business covering Letter of Credit and Bank Guarantee products. The
Bank hes also improved export credit disbursement by 17%. It continues to remum a
promiitint player in infrastructure financing. Bank is a member of the Core Coromittee of
the Government, which has been set up for finalisation of the Ultra Mega Power Projects
(UMPPs).

113BI Bank has plans to increase the shure of retail business by expansion of its network.
Designing innovative product offerings, enlarging the clamt hase and improving the yield
tiniversal and Fiary access accounts were introduced with additional free facilities
targeted at small traders and businesses, which showed good response Improvements in
existing products are continuously carried out to unrease the customer satisfaction level.