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Thursday, September 13, 2012

FinMin, SIDBI launch portal for small businesses

The Finance Ministry, in association with the Small Industries Development Bank of India (SIDBI), has launched an online portal ‘’ to support the micro, small and medium enterprises (MSME) sector.

To begin with, the Ministry will work in tandem with four banks — Dena Bank, Oriental Bank of Commerce, Corporation Bank and Indian Bank — to extend credit to MSMEs and prospective entrepreneurs.

This initiative will be extended to a cluster of 110 specialised branches across the country, Sunil Soni, Additional Secretary, Department of Financial Services, said.

“India has a distinct comparative factor advantage (vis-à-vis China) of a vast reservoir of skilled manpower. Out of 2.40 crore university graduates only 70 lakh people were absorbed in the organised sector for employment,” Soni said.

“Going forward every bank will be part of the online portal. We have already created the enabling environment. If we can create 10,000 such entrepreneurs every year, it will be a huge achievement for the country,” Soni said.

S. Muhnot, Chairman and Managing Director, SIDBI, said: “Today, start-ups are growing faster than corporates…This is proposed to be accomplished through Web-based approach to reach out to a larger number of aspiring young entrepreneurs.”

Basel III

On the Basel III capital norms, Soni said, “They come into effect in 2015…so immediately there is no crisis per se. We have 2-3 years to prepare….During the preparatory stage, if banks improve their profitability, then perhaps the need for capital from the Government or from the public will go down to that extent.”

The Finance Ministry has allotted Rs 14,000 crore in the Budget for recapitalisation of banks in FY13. Soni said the recapitalisation amount may increase in 2015.

Capital injection of Rs 15,000-20,000 crore every year can be sustained without any issues. If it goes beyond that, then there could be a problem, he added.


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