Sidbi signs MoU with OBC for co-financing small scale sector

Times News Network

New Delhi : Small Industries Development Bank of India (SIDBI) has entered into a memorandum of understanding (MoU) with Oriental Bank of Commerce (OBC) in a bid to improve the credit flow to the small scale sector.

The MoU was signed by V K Chopra, CMD, SIDBI and B D Narang, CMD, OBC. Under the arrangement, both the banks would work together in the areas of financing of projects relating to SSI sector, service sector and infrastructure.

The loan proposals would be entertained by both the institutions for term loan as well as working capital.

The participative credit would ensure SSIs has the benefit of availing of working capital through the large network of the OBC branches specially in the northern region, besides the term loan under various schemes of SIDBI.

As per the Tenth Five Year Plan estimates, there is a term loan requirement of Rs.1,23,000 crore for the small scale sector industries during the entire plan period. Participative credit arrangement between the apex level institutions for the SSI sector would facilitate fulfillment of enhanced flow of credit to the sector.

While all the SIDBI and OBC branches would be implementing the participative credit arrangement, to start with focus would e on the clusters identified by the government.

Delhi and Jaipur are important clusters in the list in which SIDBI and OBC would be jointly funding.