New Delhi: The Small Industries Development Bank of India will be able to take speedier action against defaulters after Parliament passes the Bill to amend the SIDBI Act, although its business model would remain same and it would continue to finance MSMEs, a top official said.

SIDBI was set up in 1990 as the principal financial institution for the promotion, financing and development of the Micro, Small and Medium Enterprise (MSME) sector and for co ordination of the functions of the institutions engaged in similar activities.

Last month, the government introduced SIDBI (Amendment) Bill, 2012, in the Lok Sabha to amend certain sections of the Act under which the bank was set up.

Talking about the bill, a top SIDBI official said that its business model would remain the same and it would continue to finance the MSMEs.

SIDBI's domain consists of small scale industrial units, which are defined as those where investment in plant and machinery does not exceed Rs 1 crore.

In addition, SIDBI's assistance flows to the transport, healthcare and tourism sectors and also to the professional and self-employed persons setting up small-sized professional ventures.

The official said the new Bill will not result in any change in SIDBI's business or activities but would empower it and its Board of Directors to take speedier action against defaulters and disposal of cases through authorisation by the District Magistrate or the Chief Metropolitan Magistrate.

The Bill would streamline the procedure for recovery of loans by SIDBI and also seeks to confer power upon its board to specify by unanimous resolution the investment limit for small units.

Other major changes in the proposed Bill include substitution of the term 'small scale industry' with MSME, while the amendment would also empower SIDBI to render financial assistance by way of venture capital, risk capital, factoring and discounting.

It also enables SIDBI to accept repayment of foreign currency loans in foreign currency and maintaining foreign currency loan accounts.

(Agencies)

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