SSIs get more incentives

The working capital limit of SSIs was determined by banks on the basis of a simple calculation of 20 per cent of their annual turnover. To moderate the cost of credit to SSIs, RBI will advise the banks to accord units with a good track record, thebenefit of lower spreads over the prime lending rate.

Enhanced powers would be delegated to bank managers of specialised SSI branches to ensure that most credit proposals are decided at the branch level.

At present, Small Industrial Development Bank of India SIDBI is a subisidiary of IDBI and IDBI is the major shareholder in State Finance Corporations SFCs. To equip SIDBI to play its apex role in SSI credit provision more effectively, SIDBI will be delinked from IDBI and IDBI shareholding in SFCs will be transferred to SIDBI.