The Small Industries Development Bank of India (SIDBI) should continue to stay focused on financing industrial firms in the small scale sector and not look to become like any other commercial bank and fund large corporates, said Mr Virbhadra Singh, Minister (MSME).
Towards this end, the Ministry of Micro, Small and Medium Enterprises (MSME) will oppose the proposed amendment in the SIDBI law that would allow the SIDBI board to decide the investment limit for its direct financing in various sectors, Mr Singh said. He was speaking on the sidelines of 1st Annual YES Bank-PHDCCI emerging corporate summit here.
“I am against the proposal in the current form as it would provide the SIDBI board the autonomy to decide the investment limit. We will go to the standing committee and put up our point of view,” Mr Singh said.
Allowing the SIDBI board to decide the investment limit will imply that the financial institution could start providing funding for large corporates, according to the Minister.
On the occasion, Mr Singh also released a knowledge report on the MSME sector jointly prepared by PHD Chamber and YES Bank.
Since its inception, the SIDBI is operating as a principal financial institution for the development of industrial firms in the small-scale sector.
Mr Singh felt that the investment limit should be decided by the Finance Ministry and not allowed to be decided by the SIDBI Board.