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Entrepreneurship Development
Role of SISI,DIC,NSIC and SIDBI
SUBMITTED TO
Prof. Raj
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ENTREPRENEURSHIP DEVELOPMENT
1: SISI (Small Industries Service Institute)
INTRODUCTION:
Small scale sector is one of the success stories of the modern India. Its success is writ large
over the face of the country and is equally visible all around. This is a sector that has emerged
victorious in the face of rising threats from large sector inside and from multi-nationals
abroad. The small Industries Service Institute (SISI) are the field offices of Small Industries
Development Organization (SIDO), Ministry of Small Scale Industries, Govt. of India, set up
for the promotion and development of Small Scale Industries in the State in the early fifties.
This Institute provides support / services to the State Government as well as co-ordinates
various activities at the state level for promotion and development of small scale industries.
This Institute, along with SISI, Nagpur and Branch Institute at Aurangabad, look after the
whole of Maharashtra.
Small Industries Development Organisation, under the Ministry of Industry is the Apex body
at the national level, headed by Development Commissioner, Small Scale Industries to
formulate the policy governing the Small Scale Industrial Sector in the country to chalk out
schemes and programmes for development of the SSI sector. SIDO also monitors the
implementation of policies and activities of promotion and development of Small Scale
Industries in the country, with active involvement of State directorate of Industries through its
network of 28 Small Industries Service Institute (SISI) in all the States.
Small Industries Service Institute, Mumbai provides various types of extension services and
assistance in setting up of units, promoting and developing product and Services by the Small
Scale Industries. The Institute has Technical Officers to provide
guidance in all trades i.e. Metallurgy, Mechanical, Chemical, Leather, Glass & Ceramics,
Electrical, Electronics, Food Industry, Management & Economic Investigation.
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ROLE OF SISI:
The major role of SISI is to give various service to the small scale industry
Major Extension Services provided in the Institute are given below
1) Technical Consultancy
2) Industrial Management Training
3) Economic Information
4) Entrepreneurial Development Programme, Scheme for Educated Unemployed Youth / Prime
Minister's Rojgar Yojana
5) Ancillary Developments / Sub-Contract Exchange
6) Marketing Assistance
7) Export Promotion Marketing
8) Modernisation / Upgradation Technology
9) Assistance to Rehabilitation of sick units
10) Common Facility & Training
11) Assistance to District Industries Centre / State Govt. /
Various Developmental Agencies in the State
12) Technical Assistance to various Central Government Agencies like Director General of
Foreign Trade, National Small Industries Corporation, Central Excise, Bureau of Indian
Standards, CSIR etc.
13) Exhibition / Demonstration
I TECHNICAL CONSULTANCY SERVICES
Technical guidance Identification and preparation of Project profiles / reports.
Selection of Equipment, Machinery & Raw Materials
Technical Up-gradation / Quality Control
Technical Seminar / Workshop / Clinic
To prepare technical literature / papers etc.
.
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II MANAGERIAL CONSULTANCY SERVICES
Conduct various Industrial Management Courses e.g. Personnel, Finance, Marketing,
Taxation, Export etc.
Improvement of Quality, Productivity of Labour etc.
Techno-Economical and Managerial, Appraisal reports to Banks / Financial Institutions.
Technical Training Courses on product
development etc.
Short-term / Tailor-made Technical courses.
III ECONOMICAL INVESTIGATION SERVICES
Industrial Potential Surveys / Market Surveys
Feasibility reports / State Industrial Profile
Sample Survey / Collection of statistics
SSI Census
Review Report / Production Index
Assistance and Rehabilitation of sick units
Advise / Guidance on Policy issues
Guidance on facilities available with Banks, Financial Institutions etc.
IV ENTREPRENEURIAL DEVELOPMENT PROGRAMME & PMRY
General One Month EDP Courses
Product and Process EDP Programmes
One Week EDP for Self Employed Youths
EDP for Women entrepreneurs
Product / Process Demonstration
To implement the Prime Minister's Rojgar Yojana in BMR and assistance to DIC in
implementing PMRY for Educated unemployed youths
To assist various institutions and Agencies for EDP
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V ANCILLARY DEVELOPMENT PROGRAMMES
Identification of Ancillary items for large / small scale Industries
Interaction with public / private sector undertakings
Preparation of Ancillary report
Organising State Level Ancillary Development Committee and participation in PLC
meeting
Organising Buyers - Sellers Meet / Vendor Development Programme - cum Exhibition
VI MARKETING ASSISTANCE AND SERVICES
Provide Market Information
Assist to prepare Market feasibility report
Indirect marketing support through Sub-Contract Exchange
Marketing assistance for Govt. / Semi-Govt. purchase
Programme through Single Point NSIC registration
Marketing Buyer - Sellers Meet - cum Exhibition
VII EXPORT PROMOTION SERVICES
Export Market information
Export process and procedures information
Export Management training
Export Packaging training
Seminar / Workshop on Export Related Procedures
Arrange and forward exhibits to foreign trade fairs
Preparation of Export directory and reports
VIII MODERNISATION / TECHNOLOGY UP - GRADATION SERVICES
Undertaking in-plant studies
Conduct cluster studies
Programmes on Technology up - gradation / quality -
up - gradation & ISO-9000 / Energy conservation
Conducting Awareness Programmes / Seminar / Workshop on Pollution Control & ODSPhase out
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Undertaking industry status studies
Co - ordination of Modernisation Activities
IX COMMON FACILITY SERVICES
Workshop facilities for undertaking jobs, jigs &
fixtures, process tools complicated jobs etc.
Product Development
Industrial Design
On the job 6 months training to industrial workers
Short term training courses
X LIBRARY FACILITY
The Institute has a full fledged Library containing all sorts of Technical books, Magazines,
Journals and reports relating to Industries, including project profiles and various reference
manuals etc.
XI ASSISTANCE TO STATE GOVT. AGENCIES
Provide all sorts of technical and other assistance to State agencies like DICs, State Directorate
of Industries, Corporation and various other industrial developmental agencies in the state
XII TECHNICAL ASSISTANCE TO VARIOUS CENTRAL
GOVERNMENT AGENCIES LIKE
DGFT, NSIC, Excise, BIS, CSIR etc.
All sorts of assistance and support to various NGOs
Associations and Institutions involved in the promotionand development of industries
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2:DIC ( DISTRICT INDUSTRY CENTRE):
Role Of District Industry Centre:
Role of DIC for the promotion of Small Scale & Cottage Industries:
To get the Provisional SSI Registration
a. Filled in Application Form in duplicate. (Enclosed)
b. A declaration that the proposed unit is not owned/ controlled by or subsidiary to any other
Industrial Undertaking.
c. A detailed Scheme of the proposed Unit (if project cost exceeds Rs.40.00 lacs and/ or if
comes under Special category under Pollution Control.)
d. Pollution Control Certificate for Consent to establish usually issued by DIC except special
Red where activities relates to within the purview of SSI.
i. A site clearance certificate from Local Body./Local Self Govt.
ii. A requisite fees has to be deposited based on the project cost & category in the
branch of UBI, earmarked for, in favour of Pollution Control Board.
e. However, the Provisional certificate will be issued subject to production of specific
clearance of the concerned Department for specilised items, if any.
To get Permanent SSI Registration:-
a. Filled in Application Form in duplicate. (Form Enclosed)
b. Documents regarding constitution of SSI unit :
i. In case of a limited company - the certificate of incorporation and article of
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memorandum of the association.
ii. In case of registered society - copy of registration certificate.
iii. In case of industrial co-operative - copy of co-operative registration certificate.
iv. In case of partnership firm - copy of Regd. partnership agreement.
c. Purchase Documents/ Cash Memos / Sale Agreement with Payment Receipt showing
the original value of Plant & Machinery. An affidavit in case document in respect of
purchase of Plant & Machinery/tool/implements, not available.
d. An Affidavit in the prescribed format is to be submitted to the effect that the
formation/ activity is well within the purview laid down procedures and norms laid downby the authority.
e. Pollution Control Certificate for Consent to Operate (COO) from the appropriate
authority depending on the category (Upto date List enclosed)of industry.
f. However, the Permanent certificate will be issued subject to production of specific
clearance of the concerned Department for specilised items, if any.
For Carrying on Business (COB)Clearance :--
1. The same information for Carrying On Business ( COB ) clearance required. Industrial
undertakings which cross the limit of investment as prescribed in the definition of SSI by
process of natural growth will need a "Carrying on business" license before crossing the
ceiling limit from DGTD.
2. Names ofDepartments from which the clearances are required and the average time
required for each from the date of application are given below :-
3. Name ofDirectorate orSecretariat giving clearances :-
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http://www.hooghly.gov.in/industry/affidavit_DIC.dochttp://www.hooghly.gov.in/Cooch%20Behar%20Website/Website/DOCfiles/category_DIC.dochttp://www.hooghly.gov.in/industry/affidavit_DIC.dochttp://www.hooghly.gov.in/Cooch%20Behar%20Website/Website/DOCfiles/category_DIC.doc -
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Type of Clearance
Authority
1. Pollution
Green Category Consent to establish & operate -
Green, Orange, Red Category for Consent to Establish Respective DIC
Orange & Red Category Consent -to Operate -- WBPCB, Regional Branch
Special Red Category
1. WBPCB, Kolkata Paribesh Bhavan, 10A Block - LA, Sector - III, Salt lake,
Kolkata - 700 098
2. Electricity Divisional Engineer, /, SE, Respective area.
3. Fire & Explosive Jt. Chief Controller, Explosive Dept., 8 Esplanade East,Kolkata 700 069
4. The Central Food Laboratory, Dr. Mahammad Issaq Road, Kolkata - 700 016
5. Drug License Director, Drug Control, 141 A.J.C. Bose Road, Kolkata - 700 014
6. Excise License Central/ State Excise Department
Margin Money Assistance (Loan)
In case the promoters of tiny/ small Industrial Units are not in a position to bear the cost of
margin stipulated by the Banks/ Financial Institutions, soft loan, bearing interest @ 6.50% ( @
4% for timely repayment) to the extent of 10% ( 20% for SC, ST, PH, Ex- Servicemen, Inds. Co.
Ops) of the project cost under the scheme is extended. However, the essential conditions for this
scheme are that the promoters contributions will not exceed 25% of the project cost and the
amount of such loan will not exceed Rs.5,000/- X no. of employment generated by the Unit.
Bengal State Aid to Industries Act (B.S.A.I) (Loan)
Under this scheme individual Artisans specially in rural area, are being assisted with soft loan of
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composite nature upto Rs. 10,000/- for setting up their project. The loan bears an interest @
8.00% with a rebate of 2.5% for timely repayment.
State Incentives (Subsidy)
In order to boost up Industries in the state SIS93, SIS98, SIS99, SIS2000 & WBIS 2004
have been declared. The salient features of the latest subsidy scheme i.e, SIS2000 envisages
incentives in the form of 25% ( for Gr. C area) and @15% ( for Gr. B area) subsidy on the
allowable expenditure of land & building and plant & m/cs (new) as also 50% of the interest
paid on term loan to Banks/ Financial Institutions for newly set up Industries in the District.
Waiver of Electricity Duty is allowed and also power subsidy is allowed for period of five years
for encouraging setting up of industry.
Details of the Existing Scheme WBIS - 2004
The West Bengal Incentive Scheme, 2004:
A new incentive scheme for large, medium & small scale industrial units has been announced
under notification no. 134-CI/O/Incentive/17/03/I, dated 24.03.2004, Commerce & Industriesdepartment, Govt. of WB.
The Main features (for small scale sector) :-
1. The 2004 scheme of incentive shall come into effect on & from the 1st day of April, 2004, &
shall remain valid for a period of five years ending on the 31st March 2009.
2. For the industrial under takings in the Small Scale Sector, District Industries Centres will be
the authority to scrutinize, verify & recommend the cases to District Level Committee
constituted by the C&SSI dept, for this purpose.
3. Any Cottage & Small Scale Industrial undertaking including industrial Co-operatives, Tiny
& Small Scale Service & Business(Provisional/Temporary/Permanent/Final) undertaking
registered under DIC of Dte. of C & SSI, would be eligible for this grant/assistance.
4. New unit established & commissioned for manufacturing of goods or Existing industrialunit manufacturing goods & starts commercial production for its expanded portion on or
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after 1st April 2004, will be eligible under this assistance programme.
5. An eligible industrial unit located at Gr. C area District with above condition will be entitled
to State Capital Investment Subsidy @ 10% and 7.5% for Gr. B area, of the fixed capital
investment ( means investment made in plant & machinery and also equipment installed for
pollution control measures) subject to a limit of 250 lakhs. [ The assessment of fixed capital
investment to be made on the approved project of the unit, done beforehand/at the issuance
of PMT/FNL]
NEGATIVE LIST OF INDUSTRIES:
1. Hydrogenated Edible oil,
2. Hospital, Nursing Home, Clinics, Diagnostic Centre,
3. Amusement Park,
4. Bricks(excluding fly ash bricks, sand lime bricks, refractory bricks),
5. Thermal Plants for generation of electricity except for captive use specially required for theunit/s to be registered,
6. Distribution of electricity,
7. Aqua -/culture projects.
8. All types of plantation including Tea Plantation and bought leaf tea processing factory,
9. Any other industry notified by the State Govt. for inclusion in this list.
Old age Pension to Handicraft Artisans
The District quota of such benefit have been fixed by higher authority and the amount of
benefit is Rs. 400/- per month.
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Common Facility Centre
Common Facility Centers are required to be set up in the areas having clusters of artisans
where they can work and store their products during rainy or slack seasons so that they can
market their produce in proper opportunity and get reasonable price instead of being
exploited by the traders/ middleman.
District Level Handicraft Competition
The District Industries Centre every year organise a competition amongst the artisans of the
District with Honble Sabhadhipati as the Chairman of the Committee with a view to
promote and develop innovative ideas for promotion of Handicrafts of the District and
awards are given to the best artisan.
Consent to Establish (NOC) by West Bengal Pollution Control Board
As per provisions of Water (Prevention and Control of Pollution) Act, 1974 and Air
(Prevention and Control of Pollution) Act, 1981 all new intending projects (Developmental
& Industrial) required to obtain "Consent to Establish" (popularly termed as NOC) from
State Pollution Control Board. Depending upon the pollution and hazard potential of
industrial activities, the industries are categorized as Special Red , Ordinary Red ,
Orange ,Green and Exempted.
There are sitting restrictions for special red, ordinary red and orange category of industries.
Prospective entrepreneurs should take into account these restrictions while selecting land for
their proposed industries.
The Power to grant NOC for industries is furnished below :
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http://www.wbpcb.gov.in/html/red.htm#SPREDhttp://www.wbpcb.gov.in/html/red.htm#REDhttp://www.wbpcb.gov.in/html/red.htm#ORANGEhttp://www.wbpcb.gov.in/html/red.htm#GREENhttp://www.wbpcb.gov.in/html/red.htm#GREENhttp://www.wbpcb.gov.in/html/red.htm#EXEMPTEDhttp://www.wbpcb.gov.in/html/red.htm#SPREDhttp://www.wbpcb.gov.in/html/red.htm#REDhttp://www.wbpcb.gov.in/html/red.htm#ORANGEhttp://www.wbpcb.gov.in/html/red.htm#GREENhttp://www.wbpcb.gov.in/html/red.htm#EXEMPTED -
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For obtaining NOC from the West Bengal Pollution Board, the entrepreneurs are required to
apply in prescribed Application Form which can be downloaded from the site of WBPCB.
Some of the important information and documents required to be submitted along with the
application form are as follows :-
Information
List of raw materials consumed (with quantity) and products (with quantity) per day.
Process flow chart and details.
Amount of water and different type of fuels per day.
Quantity of liquid wastes generated per day and its characteristics.
Expected quantity and characteristics of gaseous emissions (fuel burning and process)
Expected quantity of solid wastes generated including hazardous solid waste.
Proposal for controlling/ treatment of liquid, solid and gaseous emissions.
Documents
Location map
No objections & site clearance from local authority
Attested copies of land deed/allotment letter/lease document/rent receipt etc.
Technical report for pollution control measures
Affidavit in prescribed form
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3:SIDBI (Small Industries Development Bank of India)
Background:
Small Industries Development Bank of India is an independent financial institution aimed to
aid the growth and development of micro, small and medium-scale enterprises in India. Set upon April 2, 1990 through an act of parliament, it was incorporated initially as a wholly owned
subsidiary of Industrial Development Bank of India. Current shareholding is widely spread
among various state-owned banks, insurance companies and financial institutions. Beginning as
a refinancing agency to banks and state level financial institutions for their credit to small
industries, it has expanded its activities, including direct credit to the SME through 100
branches in all major industrial clusters in India. Besides, it has been playing the development
role in several ways such as support to micro-finance institutions for capacity building and on
lending. Recently it has opened seven branches christened as Micro Finance branches, aimed
especially at dispensing loans up to Rs. 5.00 lakhs.
It is an apex body and nodal agency for formulating, coordination and monitoring the policies
and programmed for promotion and development of small scale industries.
Small Industries Development Bank of India (SIDBI), set up in 1990 under an Act of
Parliament, is the principal financial institution for the promotion, financing and developmentof MSME sector in India. Corporate governance has all along been the underlying guiding
principle of the working and functioning of SIDBI. As a part of corporate governance, the Bank
remains committed to sustainability by promoting environmentally responsible lending to the
MSME sector.
Realizing that environment is one of the most important issues that need to be addressed at the
global level, SIDBI has embarked upon the mission of Green, Clean and Energy Efficient
Indian MSMEs by integrating environment protection measures in its lending to MSME sector.
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For example, SIDBI has stipulated a necessary precondition before sanctioning the credit,
wherein the enterprise has to obtain No- Objection Certificate (NOC) of Consent to Establish
from the respective State Pollution Control Board (PCB) concerned wherever required, before
the enterprise takes up the implementation of the project. Further, it has also to obtain a NoC for
Consent to operate, being the final Clearance from the PCB; before permitting the unit to
commence commercial production. The final clearance once granted is subject to review and
renewal at periodic intervals based on monitoring / inspection by the PCBs to ensure that the
unit is actually meeting the prescribed norms and parameters. Besides, SIDBI also provide
credit (e.g. under the World Bank Line of Credit) to MSMEs conforming, among others, to
E&S standards. The sustainable financing of SIDBI is facilitated by various lines of credit
(LOCs) from bilateral/multilateral institutions.
The Bank has also undertaken a number of environment friendly measures within the
organization. For example, replacing the present bulb/tube lights with CFL lights; greater use of
Video conferencing to save travel cost and energy saving; Installing the solar heater system in
the Banks office/residential building which could be used as an alternative source of energy to
generate power; water conservation measures like rain water harvesting; use of recycled paper
in official noting /records; double sided printing of all official notes/ memos, etc.
Thus, SIDBI through its environment protection oriented lending assistance to MSMEs and also
by fostering environment measures internally, endeavours to be an environmentally responsible
financial institution and strengthen the culture of doing the right thing environmentally. In
furtherance of this agenda, SIDBI plans to undertake implementation of environment friendly
measures under ISO 14000 family of standards and obtention of ISO 14001 certification. Of the
particular interest in this family of standards is ISO 14001 which outlines the generic
requirements for an Environment Management System (EMS) based on the well-established
management principle of Plan-Do-Check-Act. Under ISO 14001 standard, SIDBI would assess
the impact of its operation on the environment, understand how those impacts can be managed
and set clear objectives and targets to continuously improve on the environment performance.
The ISO 14001 would be adopted initially at the Banks Head Office at Lucknow, 5 Zonal
Offices at Lucknow, Delhi, Mumbai, Kolkata and Chennai and 5 representative branch offices
under these 5 Zonal offices. Zonal Offices at Lucknow, Delhi, Mumbai, Kolkata and Chennai
and 5 representative branch offices under these 5 Zonal offices.
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"The Bank is committed to contribute towards national goal of attaining inclusive growth by
promoting the great spirit of micro, small, and medium entrepreneurs as well as reaching out to
those at the bottom-of-the pyramid by extending developmental and financial support through
its own network and that of banks, FIs and Micro Finance Institutions. As a part of our
philosophy of responsible banking, SIDBI envisions sustainable development of the MSME
sector across its social, economic and environmental spheres."
Mission:
To empower the MSME sector with a view to contributing to the process of economic growth,
employment and balanced regional development.
Vision:
To emerge as a single window for meeting financial and developmental needs of the Indian
micro, small and medium enterprises (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 shareholders wealth and highest corporate values through modern technology
platform.
Functions meant to help small scale industries:
1. Refinances loans given to small scale sector by primary lending institutions.
2. Discounts and rediscounts bills relating to the transaction of machinery of the small scale
sector.
3. Extends seed capital through specified agencies.
4. Assistance for export of products of small-scale sector.
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5. Provides services like leasing and factoring.
6. Give financial support to purchase raw material and the sales of finished products.
CODE OF SIDBIS COMMITMENT TO MICRO, SMALL AND MEDIUM
ENTERPRISES:
(In the Code, you denotes the MSMEs and we, the Bank)
1. To act fairly and reasonably in all our dealings with you by:
Providing speedy and efficient credit and service delivery relating to our lending operations.
Meeting the commitments and standards in this Code, for the products and services we offer,
and in the procedures and practices our staff follow.
Making sure our products and services meet relevant laws and regulations in letter & spirit.
Ensuring that our dealings with you rest on ethical principles of integrity and transparency.
Operating secure and reliable banking and payment and settlement systems.
Considering cases of financial difficulty sympathetically.
2. To Help You Understand How Our Financial Products And Services Work by
Giving you information about them in any one or more of the following languages: Hindi,
English or the appropriate local language.
Ensuring that our advertising and promotional literature is clear.
Ensuring that you are given clear information about our products and services, the terms and
conditions and the interest rates/service charges, which apply to them.
Ensuring that there is no mis-selling of our products.
Giving you information on what are the facilities provided to you and how you can avail of
these, what are their financial implications and whom you can contact for addressing your
queries.
3. To Help You Use Your Account Or Service by
Providing you regular appropriate updates of your account.
Keeping you informed about changes in the interest rates, charges or terms and conditions.
4. To Deal Quickly and Sympathetically When Things Go Wrong by
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Correcting mistakes promptly and cancelling any bank charges that we apply due to our
mistake.
Handling your complaints promptly.
Telling you how to take your complaint forward if you are still not satisfied.
Providing suitable alternative avenues to alleviate problems arising out of technological
failures in the Bank.
Thematic Channels Of Assistance:
A. Finance Widening Financial Access through Innovative, need based products Indirect
Assistance / Refinance
Indirect assistance in the form of Refinance is provided to more than 900 Primary Lending
Institutions (PLIs), consisting of banks, State Financial Corporations (SFCs), State Industrial
Development Corporations (SIDCs), MFIs, etc. having a network of over 82,000 branches all
over India. The main objective of the Banks Refinance Scheme is to augment the resource
position of PLIs which would ultimately facilitate greater flow of credit to MSMEs. Refinance
support is extended for: Setting up new MSME projects and for technology up gradation &
diversification expansion, etc. of existing MSMEs; l Service Sector entities; and Infrastructure
development & up gradation.
Direct Assistance- Direct finance is primarily channelized to supplement and complement the
efforts of the banks/SFCs/SIDCs/ MFIs to meet adequate credit needs of MSMEs at affordable
rates. It is also undertaken to showcase to the banking system that loans to micro enterprises can
be made profitably and lending to the MSME sector is a viable proposition. SIDBI has evolved
itself to meet the various types of credit requirements of the MSME sector by directly offering
tailor-made financial products and services. Direct Finance is being provided through fund-
based facilities in the form of term loan assistance, resource support, working capital term loan,
MSME receivable finance, risk capital assistance, equity support, scheme for energy saving
projects in MSME sector and non-fund based facilities in the form of letters of credit,
guarantees, etc.
Fighting Poverty with Micro Finance- Micro Finance has emerged as a new paradigm for
inclusive growth by empowering hitherto neglected sections of our society, such as, women,
minorities, backward communities and the poor in the rural, unorganized sector of economy.
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C. Institution Building
While finance is the basic need of the MSMEs, they also require different non-credit facilities,
such as, equity capital, credit rating, and technology transfer and up gradation, etc. to gain extra
miles in their Endeavour to attain competitiveness. As a part of corporate responsibility to the
MSME sector, SIDBI has taken upon itself the challenging task of building various institutional
mechanisms to cater to the emerging needs of the MSME sector. Such institutional set-ups are
the subsidiaries / associates of SIDBI, which have been highlighted in the following sections.
SIDBI Venture Capital Limited (SVCL):
To catalyze entrepreneurship by providing capital and other strategic inputs for building
businesses around growth opportunities and maximize returns on investment.
Venture Funds are recognized globally as the most suitable mechanism for providing risk
capital to knowledge based, innovative and high technology businesses. Recognizing this thrust
area, SIDBI set up SVCL in July, 1999 to act as an exclusive asset management company for
managing venture capital fund, with an aim to catalyze entrepreneurship by providing capital
and other strategic inputs for building businesses around growth opportunities and maximize
returns on investment. At present, SVCL manages two SEBI registered venture capital funds,
viz. National Venture Fund for Software and Information Technology Industry (NFSIT) and
SME Growth Fund (SGF). The Growth Fund has the main focus on growing sectors of the
economy, such as, life sciences, retailing, light engineering, food processing, information
technology, health care, logistics and distribution, etc. The cumulative commitment under these
two funds aggregated at Rs. 531 crore to 55 companies as on March 31, 2009, which has further
improved to Rs. 551 crore to 56 companies as on December 31, 2009.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE):
To facilitate collateral-free loans to Micro and Small Enterprises from banks and financial
institutions Credit to Micro and Small Enterprises (MSE) sector is generally perceived as high
risk lending, more so in absence of any collateral. In order to encourage banks to lend more to
this sector, the Government of India (GoI) and SIDBI setup the Credit Guarantee Fund Trust for
Micro and Small Enterprises (CGTMSE, erstwhile CGTSI) in July, 2000 to provide credit
guarantee support to collateral free / third-party guarantee free loans up to Rs. 100 lakh
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extended by banks and other lending institutions to MSEs. This is the only credit guarantee
institution in the country exclusively set up for the benefit of MSEs in the country. The corpus
of CGTMSE is contributed by Government of India and SIDBI in the ratio of 4:1. During FY
2008-09, SIDBIs contribution was Rs. 34 crore which was 1.63% of its income and 11.37% of
its profits. The cumulative contribution of SIDBI till March 31, 2009 was Rs.351 crore, which
has been further enhanced to Rs. 381.31 crore by December 31, 2009. This corpus contribution
does not yield any financial return to SIDBI. Notwithstanding the same, SIDBI is committed to
provide Rs. 500 crore to the said corpus to sub serve the larger objective of facilitating
collateral free credit to MSEs. In order to widen its coverage and encourage banks to provide
collateral free loans to MSEs, CGTMSE has raised the guarantee cover to 85% for loans up to
Rs. 5 lakh to micro enterprises and reduced the lock-in period for claims settlement to 18
months. CGTMSE provides higher guarantee cover for loans in the range of Rs 5-50 lakh to
women entrepreneurs as compared to 75% for others. For availing guarantee cover, the one-
time guarantee fee and annual service fee have been reduced to 1.0% and 0.5%, respectively, in
respect of all loans up to Rs 5 lakh. The recent period has witnessed strong inclination of banks
to augment credit flow to the MSME sector under the Credit Guarantee Scheme of CGTMSE.
While it took 8 years to cover the milestone of one lakh guarantees, the next one lakh
guarantees could be achieved in a little over one years time. As on March 31,2009, CGTMSE
has approved 1,50,034 guarantees for an aggregate amount of Rs. 4,824.34 crore which has
increased to 2,49,164 credit guarantees for Rs. 9,192.27 crore as on December 31, 2009.
SME Rating Agency of India Limited (SMERA):
To be a facilitator in creating an enabling environment for growth of MSMEs through
qualitative input for financial intermediation, action research and policy advocacy
Information asymmetry restricts MSMEs growth potential due to lack of timely access to credit
information. Bankers find it difficult to have accurate risk assessment of MSMEs as the desired
information is not readily available. Hence, different banks assess MSME loan proposals with
different yardsticks. Thus, there has always been a need for an independent rating agency for
unbiased normative risk assessment of MSMEs. In order to fill up this gap, SIDBI, as a part of
its corporate responsibility, along with leading public, foreign and private sector banks and Dun
& Bradstreet Information Services India Private Limited (D&B), set up SME Rating Agency of
India Ltd. (SMERA) in September 2005, as an MSME dedicated third-party rating agency to
provide comprehensive, transparent
and reliable ratings and risk profiling. Ratings have proven beneficial for a number of reasons
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for both MSMEs and financial institutions. For MSMEs, ratings add credibility to their status
and help open doors to deal with large companies, especially those who engage with a big
number of vendors. SMERA ratings also serve as motivation to adopt good governance
practices which are beneficial in the long run and also act as a tool for self-correction and self-
improvement. From the perspective of the financial institutions, SMERA ratings facilitate
pricing of loan products on attractive terms
and prove useful in promoting compliance with regulatory and capital adequacy norms. SIDBI
provides interest rate rebate up to 1% to Separated MSMEs. In a short span of time, SMERA
has achieved market leader position in MSME rating by evaluating around 3400 MSMEs upto
March, 2009, which has further increased to around 5,400 MSMEs by December 31, 2009.
India SME Technology Services Ltd. (ISTSL):
To render services for technology transfer and attendant support services in order to enhance
market competitiveness of Micro, Small & Medium Enterprises and promote sustainable
development India SME Technology Services Limited (ISTSL) provides a platform for
MSME to tap opportunities at the global level for acquisition of modern technologies. Set up in
November, 2005, it acts as a Technology Bank for MSMEs in India at the national level. ISTSL
continues to pursue its strategy of rendering services for technology transfer and promotion of
energy efficient, environment friendly technologies in the MSME sector. Efforts are being
made to facilitate reduction in Green House Gases (GHG) in the sector. Such initiatives of
ISTSL are expected to strengthen and accelerate the process of sustainable development in the
MSME sector.
D. Coordination Role
With the objective of all-round development of the MSME sector, SIDBI coordinates with a
number of accredited technical and management institutions across the country to synergize
their services to the sector. In its promotional & development initiatives, the Bank has ongoing
collaboration with various Ministries of Government of India, voluntary, nongovernmental, and
many other developmental organizations. At an international level, SIDBI enjoys confidence
and close partnership with various multilateral and bilateral institutions, such as, the World
Bank; Japan International Cooperation Agency (JICA), Japan; Department for International
Development (DFID), UK; International Fund for Agricultural Development (IFAD), Rome;
KfW and GTZ Germany and Agency Franaise de Dveloppement (AFD), France for their
resource support and technical cooperation on various capacity building programmes for
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MSMEs in India.
E. Policy Advocacy
In line with its charter as the principal financial institution for MSMEs, SIDBI has been actively
involved in playing an effective policy advocacy role towards sound MSME policies and
frameworks by the Government of India (GoI), Planning Commission, Reserve Bank of India,
Indian Banks Association, etc. SIDBI is represented on the apex Board set up by GoI for ms
ME policy formulation and is also associated with various key committees and expert groups.
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4:NSIC (National Small Industries Corporation)
INTRODUCTION:
National small industries corporation Ltd. (NSIC), An ISO 9001 certified company, since its
establishment in 1955, has been working to fulfill its mission of promoting, aiding and fostering
the growth of business enterprise in the country, since its establishment in 1955, has been
working to fulfill its mission of promoting, aiding and fostering the growth of small scale
industries and industry related small scale services /business enterprises in the country. Over a
period of five decades of transition, growth and development, NSIC has proved its strength
within the country and abroad by promoting modernization, up gradation of technology, quality
conscious, strengthening linkages with large and medium enterprises and enhancing exports
project and products from small industries. NSIC facilitates credit facilities to small-scale
industries for their technology modernization programmes and marketing activities through
Equipment Financing and Marketing Financing Schemes. Under the Equipment Financing the
Corporation is offering Term loan scheme and Hire purchase Scheme. For financing the
Marketing Activities (short term) NSIC facilitates financing for marketing actives such as Raw
Material Assistance, Internet Marketing, Exports and Bill Discounting
NSIC operates through 6 Zonal Office, 26 Branch Office, 15 Sub Offices, 5 Technical Service
Centers, 3 Extension Center and 2 Software Technology Parks supported by team of over 500
professionals spread across the country. To manage operations in Gulf and African countries,
NSIC operates from its offices in Dubai and Johannesburg.
National Small Industries Corporation (NSIC) is working to fulfill its mission of promoting
aiding and fostering the growth of Micro, Small & Medium Enterprises (MSMEs) in the
country. One of the objectives of National Small Industries Corporation (NSIC) is to promote
entrepreneurship development in the country. This objective can be achieved by way of
providing handholding support to the first generation entrepreneurs by helping them to set up
their own micro & small enterprises. There is also an urgent need in the country to inculcate
entrepreneurial skills to the youth by way of skill development through which they become
employable as well as create their own enterprise.
NSIC is engaged in basic skill development training programmes through its NSIC Technical
Service Centres (NTSCs) and NSIC Technical Service Extension Centres (NTSECs). Since
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NSIC has few centres only, the reach of NTSCs is very limited geographically. In order to
increase the reach there are several trades which need to be covered to cater to the skill
demands in the country. Labour intensive mass manufacturing based on relatively lower skill
levels provide an opportunity to expand employment in the industrial sector particularly in the
MSEs. However, one of the most critical barriers to the growth of manufacturing sector is
shortage of skilled manpower. This is extremely disconcerting in view of the facts that Indias
young demographic profile has placed the country favourably in terms of manpower
availability. People can be turned to economic assets if they can be gainfully employed. It is,
therefore, necessary to invest in building their capabilities towards training thereby providing
relevant skills for productive employment.
Available data suggest that percentage of population undergoing vocational training in the
country is much lower than in other developing countries. It is therefore necessary to give
special emphasis on technical/vocational education and skill development so as to increase the
skilled workforce from 5% at present to about 50% as envisaged by the Government policies.
There is also a need to expand the number of skills for which training is provided and for this
there is an urgent need for proactive involvement of Indian industries in every aspect of skill
development.
With some of the incubators in place at NSIC, in the light of huge skill demand which exists in
the country, it is felt necessary to build skill development training modules alongwith these
incubators. To bridge this gap, idea of NSIC Training cum Incubation Centre (NSIC -TIC ) was
conceived, which takes into account providing of basic training facilities alongwith incubators
for setting up of small enterprise establishment in the Public - Private Partnership mode. NSIC-
TIC coupled with training on basic trades are envisaged to benefit the society by increasing
self employment opportunities in the country. So, far 20 nos. of NSIC-TIC have been
established pan India. Details of such NSICTICs are available on NSIC website.
NSIC Training-cum-Incubation Centres provide an opportunity for first generation
entrepreneurs to acquire skill on basic technical trades and gain exposure in all areas of business
operations such as business skills development, identification of appropriate technology, hands
on experience on working projects, project / product selection, opportunity guidance
including commercial aspects of business.
NSIC-TICs are to be set up at various places in the country under Public - Private Partnership
(PPP) mode, with a view of benefit the society by creating self-employment opportunities. In
these NSIC-TICs low cost projects using modern/appropriate technologies for setting up new
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enterprises shall be displayed in working condition. The training modules for providing basic
training in skill development
Schemes and Activities of NSIC for Promoting SSI:
NSIC continues to implement its various programmes and projects throughout the country to
assist the SSI units. The Corporation has been assisting the sector through the following
schemes and activities:
a. Composite Term Loan Scheme:
To promote small-scale sector, NSIC has launched a Composite Term Loan Scheme for the
benefit of existing and prospective entrepreneurs to acquire land and building, machinery andequipment and working capital under one roof to the tiny units.
b) Hire Purchase Scheme
Supply of indigenous and imported machinery and equipment on easy financial terms with
special focus on women entrepreneurs, weaker sections, handicapped and ex-servicemen and
SC/ST entrepreneurs.
c) Equipment leasing
It is done mainly to facilitate SMEs to expand their capacities or diversify and/or upgrade their
technology according to the needs of the market
d) Working Capital Finance
This Scheme aims at augmenting working capital of viable and well managed units, on selective
basis in case of emergent requirements to enable them to pay-off their purchase of consumable
stores, spares and production related overheads particularly electricity bills, statutory dues.
e) Raw Material Assistance
It facilitates availability of scarce raw material either through the domestic market or by
importing.
f) Marketing Support Programme
NSIC has been trying to act as a major agency to bring SMEs closer to various Governmental
purchasing agencies, with the intention of creating confidence in the purchasing agencies about
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SMEs, and their capabilities to supply goods and services of requisite quality, economic prices
and adherence to agreed delivery schedules.
g) Tender Marketing
It participates in bulk local/global tender on behalf of Small Scale Industries/Enterprises. It is
aimed at assisting SSIs with the ability to manufacture quality products but which lack brand
equity & credibility or have limited financial capabilities.
h) Integrated Marketing Support
NSIC has been operating an Integrated Marketing Support Programme in which bills pertaining
to supplies made by small scale units to eligible purchasers are discounted by NSIC up to a
certain specified limit.
i) Government Stores Purchase Programme
The units registered with the Corporation for participation in government purchase programme
are considered at or with individual purchase organizations and derive all the benefits like free
supply of tender forms, exemption from payment of earnest money, security deposits, etc.
j) Technology Upgradation
Excellent technical support is provided to SSIs/SMEs through five NSIC Technical Service
Centres. These centres have been recognised by Council of Scientific and Industrial Research
for in-house R&D. NSIC has set up a Technology Transfer Centre. The latest information is
provided to on-line connections and networks of computers on matching technology seekers
and technology providers are arranged through the Technology Transfer Centre.
k) Software Technology ParksNSIC has set up a NSIC-STP Complex under Software Technology Parks of India (STPI).
Software Technology Parks facilitates small scale units to establish their units for the 100%
export of software and also act as the major point to activate software exports directly through
NSIC. NSIC-STP.
Complex at Okhla, New Delhi is one of such Parks set up by the National Small Industries
Corporation under the Software Technology Parks of India to promote small entrepreneurs in
software development. NSIC-STP provides high speed better communication facilities through
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VSNL/SATCOM networks, built-up office space, and uninterrupted power supply, back-up
power through DG sets, a modern business centre and other administrative support.
l) Exports:
NSIC is providing a complete package of export assistance, testing facilities, pre-shipment
credit facility, export incentives etc. apart from exposure to the products of SSEs in trade fairs,
buyer and seller meets etc. The Corporation has been endeavoring to increase share of Indian
industries in purchases to United Nations Organization, it being the largest single buyer in the
world.
2) Imformediary services:
Information today is becoming almost as vital as the air we breathe. Weneed it every minute of
our working lives. And with the increase in competition and melting away of international
boundaries, the demand for information is reaching new heights.
Keeping in mind the information needs of small industries NSIC has launched its
Informediary Services. A one-stop, one-window bouquet of aids that will provide information
on business, technology and finance, and also exhibit the core competence of Indian SMEs in
terms of price and quality-internationally, as well as domestically.
NSICs Infomediary Services use a professionally managed HR base and modern technology
for dissemination of vital information-websites, sector- specific newsletters (both print and
electronic), and e-mails. Potential.
3) Other Roles of NSIC:
a) Approval of lay out plan of NSIC-TIC
NSIC shall approve the layout plan submitted by the Private Partner, of the built up/proposed
infrastructure for setting up of proposed NSICTIC.
b) Arrangement of finance for procurement of machinery and equipment required for
setting up NSIC-TIC
NSIC may consider proposal of the franchises for arranging either through bank and or through
its own resources against the provision of bank guarantee etc. The Franchise may take the help
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of NSIC in procuring such machineries / equipments by availing the services of approved
supplier for which prescribed service charges should be payable to NSIC.
c) Training of faculty
NSIC shall train the teaching faculty engaged by franchises for imparting training for NSIC
-TICs. Such training shall be provided by NSIC at the prescribed fee before start of
the training.
d) Training modules and contents
The training modules shall be approved by NSIC out of the projects tick marked by the
franchises in the suggested list of project(s) or the list of training modules submitted by
the franchises depending upon the demand of local area. The franchises shall conduct the
training programme strictly in accordance with the training modules and contents approved and
provided by NSIC.
e) Handholding support to trainees
NSIC shall provide handholding support to the successful trainees by way of arranging finance
from the banks and other support services required for setting up their own micro/small
business enterprises.
f) Monitoring by NSIC
The Franchise shall submit monthly reports in the prescribed formats and in the prescribed
manner, to NSIC for monitoring and control.
d) On completion of successful training, the candidates shall be issued a certificate with a
unique code number jointly by NSIC and Franchise.
e) The Franchise shall permit NSIC officials to inspect/surprise visits their Centres.
f) NSIC authorise the Franchise to make use of its name only to notify the understanding
between the NSIC and the Franchise for setting up of NSIC Training cum Incubation
Centre (NSIC-TIC) for Small Enterprise Establishment under Public Private Partnership
(PPP) Mode.
g) The logo and artwork of NSIC shall be made available to the franchise centres for the limited
purpose of association of Franchise with NSIC.
h) The Franchise indemnifies the NSIC of all liabilities claims, consequential damages, etc.,
occurring in setting up and running of NSIC-TICs. In this regard, the Franchise will have to
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execute an Indemnity Bond on the prescribed format to be provided by NSIC.
i) The franchise shall also enter into agreement with NSIC in the prescribed format to be
provided by NSIC, before setting up of NSIC-TICs. This agreement shall be valid for one year
from the date of signing. The performance of the centre shall be reviewed before granting any
extension in the contract.
j) The Franchise should not commit any employment opportunity to any trainee, in the name of
the NSIC.
k) Sub-Franchise is not allowed.
5. How to apply:
Companies, firms, NGOs, Educational & Technical Institutions, Industry Associations,
interested to set up NSIC-TICs under the franchise arrangements may apply on prescribed
application format with stated enclosures along with non refundable application fee of Rs.
5,000/- by way of demand draft in favour of National Small Industries Corporation Limited.