Short Notes

Write short notes on:

(a)     EXIM Bank

(b)     RRBS

(c)     NIDC

(d)     KVIC

(e)     Commercial Banks  

Ans:   (a)    EXIM Bank

The Export-Import Bank of India (EXIM Bank) was established in 1982 by an Act of Parliament.

Functions of EX1M Bank

(a)     To advance financial assistance to exporters and importers.

(b)     To give a boost to India’s export promotion strategy.

(c)     To provide finance for joint ventures in foreign countries.

(d)     To rediscount export bills.

(e)     To undertake merchant-banking services of companies engaged in export-import business.

(f)      To offer buyer’s credit to the foreign government and banks.

The Export-Import Bank has introduced clusters of excellence for quality upgradation. It has also introduced the following programmes

(a)     Export bills rediscounting.

(b)     Technology and consultancy.

(c)     Financing and relending facility to banks abroad.

Thus, EXIM Bank plays a very important role in boosting the export promotion in the country.

(b)     RRBS

A rural bank scheme has been inaugurated in India on October 2, 1975 with the objective of establishing regional rural banks to finance credit needs of the small and marginal farmers, rural artisans, agricultural labourers, small and tiny entrepreneurs. These banks came into existence with the sponsorship of central government, state government and specific commercial banks.

          The functions of RRBs are

(a)     To provide loans and advances to small and marginal farmers, agricultural labourers, artisans, etc.

(b)     To advance financial assistance to small entrepreneurs for establishing small and tiny enterprises.

(c)     To assist entrepreneurs in handicrafts and cottage sector.

(d)     To provide financial assistance to small entrepreneurs for development of trade, commerce, industries, agriculture and other allied economic activities in rural areas.

(c)     NIDC

The NIDC was established in 1954 to bring about a balanced development of industries in public and private sectors. Its main objective is to promote small and medium scale-industries.

Functions of NIDC

(a)     It gives emphasis on manufacture of capital goods and machine tools.

(b)     It undertakes industrial potential survey and seeks co-operation from private entrepreneurs to establish more industries in private sector.

(c)     It gives financial assistance for rehabilitation and modernisation of industries like cotton textiles, jute industry and machine tools industry.

(d)     It also can supply machinery, technical counselling and any other facility which the industrial units need from time to time.

(e)     To assist that type of industrial units which are conducive to the economic development of the country.

(d)     KVIC

The KVIC is a statutory body established by an Act of Parliament in April 1957. It took over the work of former All India Khadi and Village Industries Board.

Objectives of KVIC

(a)     To generate employment avenues for rural unemployed people through its different schemes such as Gramodyog Rojgar Yojana.

(b)     To develop entrepreneurship ability among the rural unemployed youths.

(c)     To achieve the goal of rural industrialisation.

(d)     To mobilise bank finance for the entrepreneurs looking to the limited resources of KVIC.

(e)     To bring about regional balance in assisting cottage and village industries.

(f)      To assist the artisans by way of providing machinery, procuring raw materials, etc.

(e)    Commercial Banks

Commercial banks assist in providing finance to the entrepreneurs. Financial assistance may take the form of term loan or working capital loan. In general, commercial banks provide short—term loans in the shape of working capital to the small entrepreneurs but with the development of industrialisation, these banks have become more and more interested to advance long-term finance to the entrepreneurs.

An important feature in financing SSIs has been Lead Bank Scheme under which each district was allotted one scheduled bank to intensify development activities. Further, the introduction of Credit Guarantee Scheme in 1960 was a big step in the field of commercial bank financing to SSIs. After nationalisation in 1969, the commercial banks have extended their activities to help small borrowers an access to bank credit. These banks have extended liberal credit facilities to the priority sectors such as agriculture and agro-based industries, small-scale industries.