Sagarmala Finance Corporation Limited (SMFCL): Objectives and Functions

Context: Sagarmala Finance Corporation Limited (SMFCL) has been established as  India’s first maritime sector-specific Non-Banking Financial Company (NBFC).

What is Sagarmala Finance Corporation Limited (SMFCL)?

• Sagarmala Finance Corporation Limited (SMFCL) is a Mini Ratna Category-I Central Public Sector Enterprise (CPSE) under the Ministry of Ports, Shipping and Waterways (MoPSW).
• It operates as a specialised Non-Banking Financial Company (NBFC) focused solely on meeting the financial needs of India’s maritime sector.
• Headquarters: New Delhi.

Objectives

• Address financing gaps in maritime infrastructure and logistics.
• Promote financial inclusion for MSMEs, startups, and educational institutions within the sector.
• Support high-growth areas such as shipbuilding, cruise tourism, and green energy.
• Contribute to India’s ambition of global maritime leadership as outlined in the Amrit Kaal Vision 2047.

Functions

Provide short, medium-, and long-term credit facilities to port authorities, logistics firms, and maritime entrepreneurs.

• Fund innovative projects like green hydrogen initiatives, shipbuilding, and the digitalisation of ports.
• Act as a financial catalyst for Public-Private Partnership (PPP) projects in port and allied infrastructure.
• Collaborate with startups and research institutions to finance maritime skill development and R&D.

What Are NBFCs (Non Banking Financial Companies)?

• NBFCs are financial institutions that provide bank-like services but do not hold a banking license.
• They do not accept demand deposits (like savings accounts) but offer loans, asset financing, and investment services.

Types of NBFCs

• Based on Asset-Liability Structures: Deposit-taking NBFCs (NBFCs-D) and non-deposit-taking NBFCs (NBFCs-ND).
• Based on Systemic Importance: Among non-deposit taking NBFCs, those with an asset size of Rs 500 crore or more are classified as non-deposit taking systemically important NBFCs (NBFCs-ND-SI).

Difference between Banks & NBFCs

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