Language : kannada-ಕನ್ನಡ 
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ರಾಜ್ಯ ಮಟ್ಟದ ಬ್ಯಾಂಕರ್‌ಗಳ ಸಮಿತಿ, ಕರ್ನಾಟಕ

राज्य स्तरीय बैंकर्स समिति, कर्नाटक

State Level Bankers Committee, Karnataka

Convenor, SLBC Karnataka Canara Bank,
Head Office Annex , 2nd Cross, Gandhi Nagar, BANGALORE : 560009


Karnataka has vibrant automobile, agro, aerospace, textile & garment, biotech and heavy engineering industries. The state has sector specific SEZs for key industries such as IT, biotechnology, and engineering, food processing and aerospace.

Karnataka is the IT hub of India & home to the fourth largest technology cluster in the world. It has 23 operational IT/ ITeS SEZs, 5 software technology parks & dedicated IT investment regions. In 2017- 18, total exports from the state aggregated to US$ 39.38 billion (up to November 2017). Karnataka has 47 IT/ITeS SEZs, three software technology parks and dedicated IT investment regions.

Key Sectors:

  • As of November 2019, the state has 312 operational, 51 notified SEZs and 62 formally approved SEZs. The Karnataka Industrial Areas Development Board has developed 141 industrial areas spread across the state. The state plans to develop and upgrade eight clusters around Bengaluru with an investment of US$ 348.4 million in coming years.
  • As of February, 2020, the state had an installed power generation capacity of 29,824.81 MW. Out of this, central utilities contributed 4,012.45 MW, private utilities contributed 17,011.88 MW and 8,800.49 MW was under state utilities.
  • Karnataka has emerged as an information technology (IT) hub of India. The state is India’s largest software exporter, with software and service exports totalling to US$ 77.80 billion in 2018-19.
  • More than 60 per cent of the biotechnology companies in India have a base in Bangalore and the state drives 50 per cent of the total revenues in India’s biotechnology sector.
  • The ITE&C (Information Technology, Electronics & Communication) department of the state has established a new IoT policy within the state with a view to attain a substantial market share in India’s IoT market by 2020.
  • Karnataka is the first state which came out with an aerospace policy in the country. Karnataka Aerospace Policy has identified an investment potential of US$ 12.5 billion in this sector during 2013–23 and plans to develop aerospace clusters in different regions of the state. Karnataka government has granted approval for investment of Rs 480 crore (US$ 68.67 million) to Goodrich Aerospace Service Pvt Ltd to establish a unit in Bengaluru.


The Micro, Small Medium Enterprise (MSME) Sector is the most vibrant and dynamic sector of our country. It is recognized as an engine of economic growth all over the world. By employing 40% of India’s labour force and contributing 45% of India’s manufacturing output, MSME’s have been regarded as the backbone of our economy. At present 4.4 million MSME’s in India accounts for about 40% of the country’s Exports. The MSME Sector plays an important role in the form of balanced and inclusive growth and further it is helpful in reducing the regional disparities.

Micro, Small & Medium Enterprises (MSMEs) form an important and growing segment of Karnataka's industrial sector. As per MSME Act 2006, MSMEnterprises have been categorized broadly into those engaged in Manufacturing and providing /Rendering Services, based on their investment on plant and Machinery.

MSME New Definition: Union Cabinet has approved the revised new definition of the MSME. The MSMEs have been redefined on the basis of investment limit and turnover size. The Medium Units will now be defined as companies with up to Rs 50 crore investment and turnover of Rs 250 crore.

Main Features of MSME:

  • Works for the welfare of artisans and workers.
  • Provides credit limit or funding support from banks.
  • Promotes entrepreneurship development and skill upgradation via specialized training centers.
  • Supports technology upgradation, infrastructural development and modernization.

Major Challenges Faced by the MSME Sector:

  • Ease of doing business remains a bottleneck. ...
  • Lack of financial expertise. ...
  • Lack of Access to Financing Solutions. ...
  • Technology remains a major deterrent. ...
  • Labour issues. ...
  • Lack of Trust. ...
  • Absence of collateral in loan.

Karnataka Industrial Policy 2020 – 25 – Objectives:

The main objectives of the new industrial policy in Karnataka are:

  • Create at least 2 million jobs
  • Facilitate investments in advanced R&D, manufacturing and innovation
  • Maintain an annual industrial growth rate of 10%
  • Attract investments of at least 5 lakh crore
  • Reach the 3rd rank amongst Indian states for merchandise exports in the next 5 year

Industrial Policy In Karnataka 2020-25 – Highlights:

Zoning Of Karnataka’s Districts

The new industrial policy categorizes the state’s districts into zones. This is aimed at developing industrially backwards areas.

  • Zone 1 and 2: industrially backward districts
  • Zone 3 and 4: industrially developed districts like Bengaluru and Mysuru

Identification Of Focus Sectors:

The key sectors identified by the policy include:
  • Automobiles and auto components
  • Electric vehicles
  • Pharmaceuticals and medical devices
  • Knowledge-based industries
  • Engineering and machine tools
  • Logistics
  • Aerospace
  • Renewable energy
  • Defense

Mechanism to deal with potentially viable sick MSME units:

State Level Inter-Institutional Committees (SLIICs) have been set up in all the States under the Chairmanship of Secretary, Industries Department of the concerned State to deal with the problems of co-ordination for rehabilitation of sick MSME units.

A Sub-Committee of SLIIC has also been set up wherein borrowers and concerned bankers are invited to discuss the issue.

Elaborate guidelines issued by the Reserve Bank of India for extending rehabilitation assistance to eligible units.

Major Causes of sickness:

There are many and varied reasons for sickness in MSME sector. Some of these are:

  • Inadequacy of working capital, delay in sanction of working capital and time gap between sanction of term loan and working capital.
  • Poor and obsolete technology
  • Problem related to availability of raw material
  • Inadequate demand and other marketing problems
  • Erratic power supply
  • Labour problems
  • Infrastructural constraints
  • Poor Management
  • Inadequate attention to R&D
  • Diversion of resources
  • Inability of the units to face growing competition due to liberalisation and globalisation

Working Group on rehabilitation of Sick units:

As per the recommendation of the Group of Ministers, RBI had set up a Working Group under the chairmanship of Shri S.S. Kohli, the then Chairman of Indian Banks Association to review the exiting guidelines in regard to rehabilitation of sick MSME units and to recommend revision of guidelines making them transparent and non-discretionary for the rehabilitation of current sick and potentially viable MSME sick units. The Working Group submitted its report in May, 2001. All the major recommendations were accepted by the RBI, including a change in the definition of sick MSME units, norms for deciding on the viability of sick units, etc. The revised definition would enable Banks to take action at an early stage for revival of the units. Based on the accepted recommendations of the Working Group, the RBI had drawn up the Revised Guidelines for Rehabilitation of sick MSME units, which were circulated on 16th January, 2002 to all the Scheduled Commercial Banks for implementation.