SIDBI plans Technology Bank

By Our Staff Correspondent

MUMBAI, JUNE 6. The Small Industries Development Bank of India (SIDBI) was planning to set up a Technology Bank to meet the technology related needs of the small scale sector, Mr. P. B. Nimbalkar, chairman and managing director, said while announcing the results here.

SIDBI has recorded a net profit of Rs. 477 crores for the year 2001 on an income of Rs. 1,619 crores. The directors have announced a dividend of 15 per cent on a paid up equity capital of Rs. 450 crores. This would result in a transfer of Rs. 67.50 crores from SIDBI to IDBI. SIDBI's net worth has increased to Rs. 3,771 crores and the asset portfolio was Rs. 17,090 crores.

In 1995, SIDBI had set up a Technology Bureau for Small Enterprises (TBSE) in association with United Nations - Asian and Pacific Centre for Transfer of Technology. TBSE provides services to facilitate transfer of technology and joint venture collaborations. The new technologies for the purpose of transfer are sourced from countries such as China, Philippines, South Korea, Australia, Germany, and the U.S. Mr. Nimbalkar said plans to convert TBSE into a full fledged Technology Bank were under active consideration.

Mr. Nimbalkar also said in technology upgradation and modernisation, SIDBI was operating a Technology Development and Modernisation Fund scheme where the term loan assistance was granted at the SIDBI's primary lending rate.

Regarding the changes in the shareholding pattern of SIDBI, Mr. Nimbalkar said in line with the amendments to SIDBI Act, the process of transfer of 51 per cent of the equity share capital subscribed and held by IDBI to 32 banks/FIs including public sector banks, GIC, LIC and other financial institutions owned or controlled by the Central Government was now under way and was expected to be completed by June 30. The board of directors of SIDBI will also be reconstituted thereafter with representation for new major shareholders such as SBI, and LIC.

On account of amendments to the SFCs (State Finance Corporations) Act, the shareholding of IDBI in SFCs would also be transferred to SIDBI along with necessary regulatory power. The chairmen of various SFCs would also be appointed by SIDBI in consultation with respective State governments. Mr. Nimbalkar said all the financial sector stakeholders would have to contribute towards recapitalisation and revitalisation of SFCs in line with the recommendations of G. P. Gupta committee.

Dwelling on the credit flow to the SSI sector and the difficulties faced by SSIs in obtaining credit from banks due to non-availability of collateral security, Mr. Nimbalkar said with a view to reducing the risk perception of banks in extending collateral free loans to tiny sector units, the Government and SIDBI had formulated a credit guarantee scheme for small industries which was launched last year. Till April 30, the Credit Guarantee Trust had guaranteed loans amounting to Rs. 8.31 crores in respect of 1,276 units of which 95 per cent of the loans were below Rs. 1 lakh.

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