Reserve Bank of India allocated Rs 10 K Crore to SIDBI

Banking Regulator, The Reserve Bank of India has allocated Rs 10,000 crore to SIDBI for setting up a venture capital (VC) fund to attract private capital for start-ups. The proposal to establish a VC fund was unveiled by Finance Minister Arun Jaitley while presenting the interim Budget last year.

The MoS (Independent Charge) for Skill Development & Entrepreneurship Rajiv Pratap said the allocation of Rs 10,000 crore as venture capital will act as a catalyst to bring in more private capital by providing equity, quasi equity, soft loan, and other risk capital for start-up companies.

The move was aimed at creation of a conducive eco-system for the venture capital in the MSME sector.

  1. SIDBI stands for Small Industries Development Bank of India. It is a non-independent financial institution aimed to aid the growth and development of micro, small and medium-scale enterprises (MSME) in India.
  2. SIDBI was set up on April 2, 1990 through an act of parliament. Its headquarters is in Lucknow.
  3. MUDRA Bank – Micro Units Development & Refinance Agency Ltd – a recently launched bank to provide loans to small entrepreneurs is a wholly owned subsidiary of SIDBI.
  4. MUDRA Bank was launched by Prime Minister Narendra Modi on 8 April 2015.
  5. The MUDRA bank classifies its clients into three categories and the maximum allowed loan sums will based on the category:
    • Shishu: Allowed loans up to ₹50,000.
    • Kishore: Allowed loans up to ₹5,00,000
    • Tarun: Allowed loans up to ₹10,00,000

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