law: The Small Industries Development Bank of India Act, 1989 
  13. Business of Small
  
  Industries Bank 
  1.     
  
    The
  
  Small Industries Bank shall function as the principal financial institution for
  
  the promotion, financing and development of industrial concerns in the
  
  small-scale sector and shall also co-ordinate the functions off institutions
  
  engaged in promoting, financing and developing the industrial concerns in the
  
  small-scale sector and may carry on and transact any of the following business,
  
  namely:-
               
  
   i.        
  
    Granting
  
  loans and advances to any State Financial Corporation, State Industrial
  
  Development Corporation, State Small Industries Corporation, scheduled bank,
  
  State Co-operative Bank or such other financial institutions, as the Central
  
  Government may, on the recommendation of the Development bank, specify, by way
  
  of refinance on such terms and conditions as it may deem fit to impose, of any
  
  loans or advances granted to industrial concerns in the small-scale sector by
  
  such corporation, bank or institution, which are repayable within a period not
  
  exceeding twenty-five years;
              
  
   ii.        
  
    Accepting
  
  discounting or rediscounting bills of exchange and promissory notes made, drawn
  
  accepted or endorsed by industrial concerns in the small-scale sector or by any
  
  person selling products manufactured by an industrial concern in the
  
  small-scale sector;
             
  
   iii.        
  
    Subscribing
  
  to or purchasing stocks, shares bonds or debentures of, any State Financial
  
  Corporation, State Industrial Development Corporation, State Small Industries
  
  Corporation, National Small Industries Corporation or such other financial
  
  institutions, as the Central Government may, on the recommendation of the
  
  Development bank, specify;
             
  
   iv.        
  
    Granting
  
  lines of credit or loans and advances to any State Financial Corporation, State
  
  Industrial Development Corporation, State Small Industries Corporation,
  
  National Small Industries Corporation or such other financial institutions, as
  
  the Central Government may, on the recommendation of the Development Bank,
  
  specify;
              
  
   v.        
  
    Granting
  
  loans and advances to any industrial concern in the small-scale sector or
  
  subscribing to, or purchasing, or under-writing the issue of stocks, shares,
  
  bonds or debentures of, any such concern:
  Provided that nothing contained in this
  
  clause shall be deemed to preclude the Small Industries Bank from granting
  
  loans or advances to, or subscribing to the debentures of, an industrial
  
  concern in the small-scale sector, the amounts outstanding thereon may be
  
  convertible at the option of the Small Industries Bank into stocks or shares of
  
  that concern within the period the loan, advance or debenture is repayable.
  Explanation.- In this clause, the expression
  
  "the amounts outstanding thereon" used in relation to any loan or
  
  advance, shall men the principal, interest and other charges payable on such
  
  loan or advances as at the time when the amounts are sought to be converted
  
  into stocks or shares;
             
  
   i.        
  
  
             
  
   ii.        
  
  
             
  
   iii.        
  
  
             
  
   iv.        
  
  
             
  
   v.        
  
  
             
  
   vi.        
  
    Granting
  
  loans and advances-
  a.     
  
    To
  
  any person exporting; or
  b.    
  
    To
  
  any person outside India, in connection with the export; or
  c.     
  
    For
  
  the execution of turn-key projects outside India by any industrial concern in
  
  the small-scale sector;
            
  
   i.        
  
  
            
  
   ii.        
  
  
            
  
   iii.        
  
  
            
  
   iv.        
  
  
            
  
   v.        
  
  
            
  
   vi.        
  
  
            
  
   vii.        
  
    Granting
  
  loans and advances to a scheduled bank or any other bank or such financial
  
  institutions as the Central Government may, on the recommendation of the
  
  Development Bank, specify, by way of refinance of loans and advances granted by
  
  it for purposes of export;
           
  
   viii.        
  
    Accepting,
  
  collecting, discounting, rediscounting, purchasing, selling or negotiating in
  
  or outside India, bills of exchange or promissory notes arising out of
  
  transactions, relating to export or import and granting of loans and advances
  
  in or outside India against such bills or promissory notes;
             
  
   ix.        
  
    Granting,
  
  opening, issuing, confirming or endorsing letters of credit and negotiating or
  
  collecting bills or other documents drawn thereunder;
              
  
   x.        
  
    Granting
  
  lines of credit to the Government of any foreign State or any financial
  
  institution or person outside India for the purpose of export or import;
             
  
   xi.        
  
    Financing
  
  export from or import into India of machinery, equipment or other assets
  
  including vehicles, ships and aircraft's on lease, sub-lease or hire purchase
  
  basis by or for any industrial concern in small-scale sector;
            
  
   xii.        
  
    Buying
  
  or selling of or entering into such other dealings in, foreign exchange, as may
  
  be necessary for the discharge of the functions of the Small Industries Bank;
           
  
   xiii.        
  
    Opening
  
  of any account in any bank in or outside India or making of any agency
  
  arrangements with, or acting as an agent or correspondent of, any bank or other
  
  institution in or outside India;
          
  
   xiv.        
  
    Transferring
  
  for consideration any instrument relating to loans and advances granted by it o
  
  any industrial concern in the small-scale sector;
           
  
   xv.        
  
    Granting
  
  loans and advances to any person for purposes of investment in any industrial
  
  concern in the small-scale sector;
          
  
   xvi.        
  
    Guaranteeing
  
  loans raised from, or credit arrangements made with, any bank, financial
  
  institution or other lending agency in any country outside India in foreign
  
  currency, with the approval of the Central Government, by industrial concern in
  
  the small-scale sector;
         
  
   xvii.        
  
    Guaranteeing
  
  deferred payments due from any industrial concern in the small-scale sector;
        
  
   xviii.        
  
    Guaranteeing-
  a.     
  
    Loans
  
  raised by industrial concerns in the small-scale sector which are floated in
  
  the public market, or
  b.    
  
    Loans
  
  raised by any industrial concern in the small-scale sector from any scheduled
  
  bank or State Co-operative Bank or State Financial Corporation or State
  
  Industrial Corporation or such other financial institutions as the Central
  
  Government may, on the recommendation of the Development Bank specify;
          
  
   i.        
  
  
          
  
   ii.        
  
  
          
  
   iii.        
  
  
          
  
   iv.        
  
  
          
  
   v.        
  
  
          
  
   vi.        
  
  
          
  
   vii.        
  
  
          
  
   viii.        
  
  
          
  
   ix.        
  
  
          
  
   x.        
  
  
          
  
   xi.        
  
  
          
  
   xii.        
  
  
          
  
   xiii.        
  
  
          
  
   xiv.        
  
  
          
  
   xv.        
  
  
          
  
   xvi.        
  
  
          
  
   xvii.        
  
  
          
  
   xviii.        
  
  
          
  
   xix.        
  
    Guaranteeing
  
  the obligations of any scheduled bank or State Co-operative Bank or State
  
  Financial Corporation or State Industrial Development Corporation or State
  
  Small Industries Corporation or such other finical institution as the Central
  
  Government may, on the recommendation of the Development Bank, specify, arising
  
  out of, or in connection with, underwriting the issue of stocks, shares, bonds
  
  or debentures of any industrial concern in the small-scale sector;
           
  
   xx.        
  
    Providing
  
  factoring services to any industrial concern in the small-scale sector;
          
  
   xxi.        
  
    Providing
  
  technical and financial consultancy, merchant banking and extension services;
         
  
   xxii.        
  
    Undertaking
  
  activities for promotion of industry in the small-scale sector including
  
  entrepreneurial development programs, raw material purchase, marketing support
  
  and promotion of, or financial support to, agencies engaged in such activities;
        
  
   xxiii.        
  
    Acquiring,
  
  with the approval of the Central Government on the recommendation of the
  
  Development Bank, the undertaking including the business, assets and
  
  liabilities of any institution the principal object of which is the promotion
  
  or development of industry in the small-scale sector in India, or the grant of
  
  financial assistance for such promotion or development;
        
  
   xxiv.        
  
    Leasing,
  
  sub-leasing or giving on hire or hire-purchase any movable or immovable assets
  
  to any industrial concern in the small-scale sector;
         
  
   xxv.        
  
    Undertaking
  
  research and surveys for evaluating or dealing with marketing or investments
  
  and undertaking and carrying on techno-economic studies in connection with the
  
  development of industry in the small-scale sector;
        
  
   xxvi.        
  
    Providing
  
  technical, legal, marketing and administrative assistance to any industrial
  
  concern in the small-scale sector or any person for promotion, management or
  
  expansion of any industrial concern in the small-scale sector;
       
  
   xxvii.        
  
    Planning,
  
  promoting and developing industries and in the small-scale sector;
      
  
   xxviii.        
  
    Promoting,
  
  forming or conducting or associating in the promotion, formation or conduct of
  
  companies, subsidiaries societies, trusts or such other association of person
  
  as it may deem fit;
        
  
   xxix.        
  
    Acting
  
  as agent of-
  a.     
  
    The
  
  Central Government or of the Reserve Bank or of the Development Bank, or
  b.    
  
    Such
  
  other Government or person as the Development Bank may authorise;
         
  
   i.        
  
  
         
  
   ii.        
  
  
         
  
   iii.        
  
  
         
  
   iv.        
  
  
         
  
   v.        
  
  
         
  
   vi.        
  
  
         
  
   vii.        
  
  
         
  
   viii.        
  
  
         
  
   ix.        
  
  
         
  
   x.        
  
  
         
  
   xi.        
  
  
         
  
   xii.        
  
  
         
  
   xiii.        
  
  
         
  
   xiv.        
  
  
         
  
   xv.        
  
  
         
  
   xvi.        
  
  
         
  
   xvii.        
  
  
         
  
   xviii.        
  
  
         
  
   xix.        
  
  
         
  
   xx.        
  
  
         
  
   xxi.        
  
  
         
  
   xxii.        
  
  
         
  
   xxiii.        
  
  
         
  
   xxiv.        
  
  
         
  
   xxv.        
  
  
         
  
   xxvi.        
  
  
         
  
   xxvii.        
  
  
         
  
   xxviii.        
  
  
         
  
   xxix.        
  
  
         
  
   xxx.        
  
    Doing
  
  any other kind of business which the Central Government may, on the
  
  recommendation of the Development Bank, authorise;
        
  
   xxxi.        
  
    Generally
  
  doing such other acts and things as may be incidental to, or consequential
  
  upon, the exercise of its powers or the discharge of its duties under this Act
  
  or any other law for the time being in force including sale or transfer of any
  
  of its assets.
  1.     
  
  
  2.     
  
    The
  
  Small Industries Bank may receive in consideration of any of the services
  
  mentioned in sub-section (1) such commission, brokerage, interest, remuneration
  
  or fees as may be agreed upon.
  3.     
  
    The
  
  Small Industries Bank shall not grant any loan or advance or other financial
  
  accommodation on the security of its own bonds or debentures.