TID BITS

No Collateral for SSIs loans upto Rs 25 lakh

In an attempt to improve bank credit to the small-scale sector, the Reserve Bank of India (RBI), has said banks could dispense with collateral requirements for loans upto Rs 25 lakh. Also bank loans to NBFCs for the purpose of on-lending to small-scale industries (SSI) would be counted as part of priority sector loans.

In its mid-term review of the monetary and credit policy for 2003-04, the central bank has said that banks, on the basis of the track record and the financial position of the SSI units, could increase the loan limit from Rs. 15 lakh upto Rs. 25 lakh, without collateral. This will however require the approval of their boards.

In another move aimed at encouraging foreign banks to improve their direct lending to SSIs and discourage them from parking the shortfall in their priority sector target with SIDBI, RBI has decided that the interest rate on funds parked with SIDBI will be at the bank rate. This means that foreign banks who currently earn 6.75% on such deposits, will henceforth earn 6%. The move will also reduce the cost of funds to SIDBI.

Besides, SIDBI is expected to take appropriate steps to ensure that priority sector funds are utilised expeditiously and benefits on reduction in interest rates are passed on to the borrowers.

Besides, keeping in view the credit needs of the sector, the RBI has proposed constituting a working group to assess the progress made in implementation of Kapur Committee recommen-dations and suggest ways to improve credit flow considering, in particular, the backward and forward linkages of this sector with large corporate. The group will also look into methods of utilisation of priority sector shortfall deposits with SIDBI and suggest appropriate institutional arrangements for enhancing the credit delivery on a timely basis and in adequate measure to SSIs.

The latest economic survey for 2002-03 has expressed concern over the reduction in the share of advances to SSI units in case of both public sector and private sector banks. However, at present there is no sub-target for small-scale sector lendings for domestic banks as part of priority sector lending. At present 40% of net bank credit (NBC) has to be for the priority sector. Sub-target set by regulators are 18% of NBC for agriculture and 10% of NBC for weaker sections.

COLLATERAL -FREE LOANS

IT is now three full years since the Credit Guarantee Scheme was launched to enable banks lend to small-scale units without making them pledge their assets for the loans. But statistics show that the scheme has been ineffective.

Till January 8, only 12,700-odd units have been given guarantees for loans involving Rs. 161 crore, according to sources in the Small Industries Development Bank of India (SIDBI).

Only 12,700 of the 33 lakh small units have benefited from the scheme.

The Scheme is administered by the Credit Guarantee Fund Trust for Small Industries, a Trust set up by the Union Government and SIDBI. The trust stands guarantee to loan up to Rs. 25 lakh given to a small unit by a member lending institution.

Software Development Centre in Kerala

Trivandrum recently witnessed, for the second time this year, the launch of a British unit in its famed Technopark – Allianz Cornhill’s first ever offshore Software Development Centre and wholly-owned subsidiary. Allianz is one of the UK’s leading general insurers and part of the Allianz Group, which is one of the world’s largest financial services providers. Launching the new center, British Deputy High Commissioner in Southern India, Stuart Innes said, "I congratulate Allianz on choosing a very fine investment destination in South India. I also congratulate them on opening their office in the splendid Technopark. Earlier this year my predecessor inaugurated UK-based Sherston’s multimedia development center at this same venue. Allianz’s entry, so close on the heels of another British investment, is a tribute to Kerala’s welcome to business in the knowledge economy. The Kerala government and Technopark can be justifiably proud of winning Allianz over."

The wholly owned subsidiary, Allianz Cornhill Information Services Pvt. Ltd., will focus on software development and maintenance for Mainframe, Oracle and Web areas. They are "wired" to the UK through their state-of-the art video and audio hotline network in the Chandragiri Building in Technopark. The firm plans to use the team in Trivandrum as an extension of the development team in the UK, effectively helping the company grow its systems development capacity and improve its competitiveness globally.

ALUVA PLASTIC CONSORTIUM

Under the Cluster Development Programme, Aluva Plastic Consortium Private Limited planned for establishing a Common Facility Service Centre. The Foundation stone laid for the Common Facility Service Centre by Sri P.H. Kurian, IAS, Director of Industries & Commerce, on 25.6.2004.

After the foundation stone laying ceremony meeting conducted at IDA Trade Centre, Industial Development Area, 4th Mile, Aluva. Shri K.K. Ibrahim, Managing Director of Aluva Plastic Consoritum Pvt. Ltd., Shri N.K. Mohanan, Addl.Director of Industries and Commerce, Shri P.L. Narasimha Rao, Asst. Manager, SIDBI, Ernakulam, Shri B. Prasanna Kumar, General Manager, District Industries Centre, Ernakulam, Shri V.C. George, LDM, Shri V.K. Joseph, President, KSSIA, Shri P.K. Mustafa, President, Aluva Development Area Industries Association, Shri C.K. Majeed, Director, Perumbavoor Plywood Consortium, Shri K.M. Johnson, Manager, District Industries Centre and other dignitories were present.

ENTREPRENEURSHIP DEVELOPMENT TRAINING PROGRAMME OF UNIVERSITY CENTRE, THRISSUR

Entrepreneurship Development Training Programme for Final Year M.B.A. Students of John Mathai Centre under University of Calicut, Thrissur organised by Department of Industries & Commerce and ED Club of JMC, Aranattukara, Thrissur. Shri N.K. Mohanan, Addl. Director, Directorate of Industries and Commerce delivered keynote address highlighting the importance and need of developing entreprenureship in youth.

 

WORKSHOP ON ENTREPRENEUR DEVELOPMENT BY ED CLUB JMC

The ED Club JMC, took shape in 2002- with the support of DIC, Ayyanthole, Thrissur, under the guidance of Sri V.M. Xaviour, Coordinator MBA evening programme. However focussed the activities began in April 2004 with the conception, planning and development of a two week workshop on entrepreneurship development. It was held for the final year MBA students (2003 batch) at Hotel Lucia International from 21.04.2004 to 25.05.2004.

The emphasis on the small scale sector by the department of Industries - was perhaps the key instigating factor in the conception of such a workshop. Focus was on policy initiative to promote and stimulate support and sustain the SSI. The role of students as future entrepreneurs and as monitors / coordinators to streamline the efforts of the government was perhaps the prime focus.

AIMS OF ED CLUB are

* To analyse technological opportunities, customers and market changes with a view to venture new ideas.

* To built purposeful and effective knowledge based systems for analysis and hardwork, and turn this knowledge into future opportunities.

* To continuously expand ourselves by learning new ways of doing, thus continuously expand the capacity to create future.

* To track the performance of successful entrepreneurs and gain insight from them.

* Keep a watch on the ever dynamic environment and the changing technology.

ED CLUB MBA PROGRAMME JMC

The MBA Programme at Dr. John Mathai Centre, Arnattukara, Thrissur comes under the Department of Commerce and Management Studies - University of Calicut. Through the course, the aim is to promote professional management skills in suitable candidates to cater to the demand for management cadre, in and around Thrissur District - where industries albeit have thrived.

FC2/25980/03 Directorate of Industries & Commerce
Thiruvananthapuram, Dated 2.01.2004

 

CIRCULAR

 

Sub : Industries - State Investment Subsidy to DTP units.

Ref : 1. Lr. No. P1/331/2001 dated 22.09.2003 of GM, DIC, Kozhikode.

2. Minutes of the meeting of the State Level Committee on State Investment Subsidy held on 3.12.2003.

 

General Manager, District Industries Centre, Kozhikode in his letter cited 1st above, sought clarification whether, units engaged in DTP work and registered as SSI earlier and categorized under SSSBE at present are eligible for Subsidy.

This issue was placed in the State Level Committee on State Investment Subsidy held on 3.12.2003. The Committee observed that as per GOI Lr. No. 2(3)/91-SSI-Board of the Office of the Development Commissioner (SSI) dated 3.1.92 and recognised Data processing and Printing Press as industrial activity registrable as SSI. Since then, all Governmental assistances given to SSI units viz, SIS, MML etc. were extended to DTP units. Subsequently, as per Lr. No. 5(1)/2001-SSI Bd & Pol. dated 10.9.01 of the Office of DC (SSI), DTP was classified as SSSBE activity prospectively.

Government of Kerala, as per G.O. (MS) No. 149/93/ID dated 26.11.93 had included SSSBE units under negative list, which are thereafter not eligible for any financial assistance from Government. Since the GOI communication dated 10.9.01 recognising DTP as SSSBE was issued on 10.9.01 and which does not mention any retrospective effect to the notification, all DTP units registered provisionally prior to 10.9.01 were extended SIS as per the norms of SIS Manual.

Now, the Accountant General in his Audit Inspection has objected that the sanction of SIS to DTP units after 10.9.01 is irregular. The State Level Committee discussed the case and opined that if an industrial unit registers with DTP activity before 10.9.01, it would be appropriate to extend all Government assistance to them. But, it will not be enough if only a provisional registration is taken before 10.9.2001 without any effective steps for substantial investment. The Committee decided to sanction subsidy to all DTP units subject to the following conditions :-

a) The unit is provisionally registered before 10.9.2001 and

b) The unit has acquired or has been allotted land for setting up the unit and has applied for financial assistance before 10.9.2001;

or

c) In case of self financed units, acquired the necessary Plant & Machinery / equipments or has placed firm orders for the same before 10.9.2001 which to be evidenced by advance payments through cheques or Demand Draft, credited to the account of the supplier prior to 10.9.2001.

All recommending authorities i.e. GM, DICs; KFC and KSIDC are hereby directed to proceed with the above decision of the SLC.

 

Director of Industries & Commerce