State Financial Corporation of India Introduction A

Published on July 2016 | Categories: Types, School Work, Essays & Theses | Downloads: 17 | Comments: 0 | Views: 223
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STATE FINANCIAL CORPORATION OF INDIA Introduction A Central Industrial Finance corporation was set up under the industrial Finance corporations Act, 1948 in order to provide medium and long term credit to indus trial undertakings which fall outside normal activities of commercial banks. The State governments expressed their desire that similar corporations be set up in states to supplement the work of the Industrial financial corporation. State go vernments also expressed that the State corporations be established under a spec ial statue in order to make it possible to incorporate in the constitutions nece ssary provisions in regard to majority control by the government, guaranteed by the State government in regard to the payment principal. In order to implement t he views Expressed by the State governments the State Financial Corporation bill was introduced in the Parliament. Statement of objects and reasons In order to provide medium and long term credit to industrial undertaking, whic h fall outside the normal activities of commercial banks, a central industrial f inance corporation was set up under the industrial Finance Corporations act, 194 8.The state governments wished that similar corporations should be set up in the ir states to supplement the work of industrial financial corporation. The inten tion is that the State corporations will confine to financing medium and small s cale industrial and will , as far as possible consider only such access which ar e outside the perview of industrial fiancé corporation .The main features of th e State financial Corporations Act 1951:i.The bill provides that the state gover nment may, by notification in the official gazette, establish a financial corpor ation for the state.ii.The share capital shall be fixed by the State government but shall not exceed Rs 2 crores . The issue of the shares to the public will be limited to 25 % of the share capital and the rest will be held by the State Gov ernments, The Reserve Bank, Scheduled Banks, Insurance Companies, Investme

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