You are on page 1of 21

ROLE OF DIFFERENT BANKS (A COMPARISON) FOR MSME/SME AND INSTITUTIONS SUPPORTING THEM

Role of Banks

ROLE OF BANKS
Apart from specialized institutions which provides financial base for setting up the entrepreneurship project, our public and private banks also involved in the development of future businesses. We are taking a outlook and comparison for the following banks: IDBI-Industrial development bank of India. SBI-State bank of India. ICICI-Industrial credit and Investment corporation of India. HDFC-Housing development finance corporation. BOB- Bank of Baroda.

IDBI
IDBI Bank has been actively engaged in providing a major thrust to financing of SMEs. With a view to improving the credit delivery mechanism and shorten the Turn Around Time (TAT), IDBI Bank has developed a special business model to serve the SMEs in India. The Bank has set up 24 City SME Centers (CSCs) across India in Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Pune to name a few. These CSCs are the Bank's hubs while dedicated SME desks have been set up in several branches across these cities. These branches serve as front offices for sales delivery and customer service

DIFFERENT LOANS:TYPES
SME Finance Products: Sulabh Vyapar Loan , Dealer Finance Funding under CGFMSE, Direct Credit Scheme SIDBI Preferred customer scheme IDBI Bank / SIDBI, Vendor financing (Pre Sale) Vendor financing (Post Sale), Lending Against the Security of Future Credit Card Receivables

Continuing:
Working Capital Financing Software Development Entities Finance to Medical Practitioners Loan to SRWTO-small road and water transport operations. Lending Against the Security of Future Credit Card Receivables SME Hosiery Special Current Account

Common between different loans


Eligible Segments- Micro and Small Enterprise (manufacturing / services, Distribution chain partners) Facility-Overdraft, Cash Credit, Term loan, Bills Discounting Purpose Loan Amount-UP TO 500 LACS. Tenor-may/may not be time bound. Pricing- linked to govt. lending rates. Security-PG of the proprietor / partners/ promoter directors Processing charges- usually 1% fee.

SBI-State bank of India.


term loans, working capital and equity fund finance Rs 5 lakh, no margins are involved. For needs ranging from Rs 5 lakh to Rs 20 lakh, the margin is set at 10 per cent. Term loans for acquisition of fixed assets Working capital loans financing current assets Letter of credit for acquisition of machinery and purchase of raw materials

Continuing SBI.
Deferred payment guarantees for purchase of machinery on deferred payment basis. Bill facility for purchase of raw materials and for sale of finished goods. Composite loans (term loans plus working capital) up to Rs 25 lakh. Bank guarantee in lieu of security deposits to be made with government department/other departments for execution of orders. Names of the loans; Transportation loans, cyber plus, dal mill, paryatan plus, SSI Loans, SME Petro card, Retail trade etc.

ICICI BANK
Working capital finance. Vendor/Dealer finance. Equipment finance. IMPORT/EXPORT FINANCE. Other important facilities.

HDFC Bank
Working capital finance Health care project finance Short term financing Bill discounting Export credit Infrastructure development facilities. Channel financing

Bank of Baroda: SME Loan Factory


Baroda Vidyasthali Loan Baroda Arogyadham Loan Baroda Laghu Udhyami Credit Card

Baroda Artisans Credit Card (BACC)


Technology Up gradation Fund Scheme (Tuffs) For Textile And Jute Industries

Credit Linked Capital Subsidy Scheme (Clcss) For Ssi Units


Composite Loans

Bank of Baroda
Continuing: Collateral Free Loans Under Guarantee Scheme Of Credit Guarantee Fund Trust For Micro And Small Enterprises Loans under National Equity Fund (NEF) Scheme

SME Short Term Loans


SME Medium Term Loans Baroda SME Gold Card Scheme for Financing Energy Efficiency Projects Margin Money Scheme under Rural Employment G

Institutions supporting small scale Industries:


Central Level: SSI Board- Small scale industries Board KVIC- Khadi and Village industries commission. SIDO- Small Industries Development organization. NSIC- National small industries corporation Ltd. NSTEDB-The science and technology entrepreneurship development board. NPC-National productivity council. NISIET- National institute of small industry extension and training. NIESBUD-National institute for entrepreneurship and small business development. IIE-Indian Institute of Entrepreneurship. EDI- Entrepreneurship development institute.

Continuing: State Level: DIs- Directorate of industries DICs-District Industries centre SFCs-state financial corporations SIDCs/SIICs-state Industrial development /Investment Corporation. SSIDCs-state small Industrial development corporations. Others: Industry associations Non governmental organizations R&D Laboratories.

DETAIL-SSI BOARD
Central level institutions: SSI Board-formed in 1954 having union industry minister as the chairman, devoted to: Policies and programmes, development of industries in a specific region such as north east, credit facilities, taxation and modernization, marketing And sickness removing measures.

KVIC
The KVIC is a statutory body created by an ac of parliament, to promote Khadi and other village industries in the rural India. The other role of KVIC is building up reserve of raw material and supply for producers, providing technical and designing information to the institutions which are working for the development of the rural area.

SIDO-Small industrial development

organization.
SIDO functions under the ministry of SSI, established in 1954. The important role includes tool training, training institutions, training for entrepreneurs, technical and managerial consultancy, assistance for exports, pollution and energy audits. The DC-development commissioner SSI, is under the union ministry of industry. The role includes the monitoring, coordinating and arranging the necessities for the development of small scale industries. Regional testing centers, central footwear training institutes, key functions are: Entrepreneurial Development and management training, skill development, preparation of project files, plant modernization studies, collection of data- for Prime Ministers Rozgar yojna.

NSIC National small scale Industries corporation Ltd.formed in 1955, providing vital services for the SSIs. The major roles are: Machinery and equipment hire purchase Assistance for procurement of raw material Marketing assistance, Technology transfer centre, Financial assistance schemes,100% lease on the purchase of the technology up gradation and tax rebate on full year rentals.

OTHERS
NABARD-National bank for agricultural and rural development-loans to artisans, handicrafts, cottage etc. HUDCO-Housing and urban development corporation Ltd-social sector infrastructure, creation of hosing facility. TCOs-Technical consultancy organization, preparation of the project files, feasibility study, marketing research, identify potential entrepreneurs, management consultancy and skill up gradation programme.

NGOs/ASSOCIATIONS
NGOs/associations with financial aid from government. Some are: Karnataka small-scale industries association Kerala state small-scale industries association United cycle parts manufacturers association, Ludhiana Vidharba industries association, Nagpur. M.P Laghu udyog sangh, Bhopal. Tamil Nadu small and tiny industries association, Chennai. Udyog vihar industries association, Gurgaon. PHD chamber of commerce and industry, New-Delhi. Maharashtra industrial development corporation, Nagpur.

Small Industries Development Bank of IndiaSIDBI.