SIDBI Current Affairs - 2019
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The Reserve Bank has come out with a new policy for overseas borrowings. The RBI has rationalized the earlier policy in consultation with the Government of India.
Features of the New Overseas Borrowing Policy
The features of the new policy are:
- The new policy allows all eligible borrowers to raise External Commercial Borrowings (ECB) up to $750 million or equivalent per financial year under the automatic route replacing the existing sector wise limits.
- To liberalise the framework ECB and rupee-denominated bonds Tracks I and II under the existing framework are merged as ‘Foreign Currency denominated ECB’ and Track III and Rupee Denominated Bonds framework are combined as ‘Rupee Denominated ECB’ to replace the current four-tiered structure (Track I, II and III denotes amount and maturity of funds raised).
- All-in cost ceiling per annum has been pegged at the benchmark rate plus 450 bps spread.
- The minimum average maturity period (MAMP) has been kept at three years for all ECBs, irrespective of the amount of borrowing except the borrowers specifically permitted in the circular to borrow for a shorter period.
- The list of eligible borrowers has been expanded to include all entities eligible to receive foreign direct investment (FDI).
- The new policy allows port trusts, units in SEZ, SIDBI, EXIM Bank, registered entities engaged in micro-finance activities, registered societies/trusts/ cooperatives and non-government organisations to borrow.
- Negative list for which the ECB proceeds cannot be utilised includes real estate activities, investment in the capital market, equity investment, working capital purposes except foreign equity holder, repayment of Rupee loans for except foreign equity holder.
The recent changes that have been brought out in the ECB policy are likely to help wider set of eligible borrowers i.e. corporates and other entities to avail ECBs to meet their capital needs with the Uniform Minimum Average Maturity Period requirements, uniform all-in-cost ceilings and small negative end-user list.
Small Industries Development Bank of India (SIDBI) has launched Udyam Abhilasha (उद्यम अभिलाषा), a national level entrepreneurship awareness campaign. It was launched in 115 Aspirational Districts identified by NITI Aayog in 28 States.
The campaign will run from 3 October to 8 October, 2018 across India and reach out to around 15,000 youth. It will create and strengthen cadre of more than 800 trainers to provide entrepreneurship training to aspiring youths across these districts to enter admired segment of entrepreneurs.
For implementing this campaign, SIDBI has partnered with CSC e-Governance Services India Limited, a Special Purpose Vehicle, (CSC SPV) under Ministry of Electronics & IT through their CSCs. It will also tie-up with Banks, NABARD, NBFCs, SFBs, District Industries Centres, State Government etc.
CSC Village Level entrepreneurs (VLEs) will play role of catalyst under this campaign for these aspiring entrepreneurs. VLEs will provide training, support aspirants to establish new units, assisting them in availing loans and make them aware about various Government initiatives like Pradhan Mantri Mudra Yojana, SUI etc. and educate them in business literacy.
Objectives of Udyam Abhilasha
- Inspire rural youth in aspirational districts to be entrepreneurs by assisting them to set up their own enterprise.
- Impart trainings through digital medium across the country,
- Create business opportunities for CSC-VLEs.
- Focus on women aspirants in aspirational districts to encourage women entrepreneurship.
- Assist participants to become bankable and avail credit facility from banks to set up their own enterprise.
Small Industries Development Bank of India (SIDBI)
SIDBI is principal development financial institution for promotion, financing and development of Micro, Small and Medium Enterprises (MSME) sector in India. It was established on April 2, 1990 through an Act of Parliament (thus, it is statutory body). It is headquartered in Lucknow, Uttar Pradesh. It facilitates and strengthens credit flow to MSMEs and address both financial and developmental gaps in MSME eco-system across the country.