STATE FINANCIAL CORPORATION OF INDIA A Central Industrial Finance corporation was set up under the industrial Finance co rpor

ations A ct , 1948 in ord er to provid e med ium an d long t er m cr ed it to industr i al und ert ak ings w hi ch f all outs id e nor mal activit i es of co mmer ci al b anks . Th e Stat e gov ern ments expr ess ed th ei r d esir e th at si mil ar co rporation s b e s et up in st at es to suppl ement th e w ork of th e Indust ri al fin an ci al corpor ation. St at e gov ern ments also expr ess ed th at th e S t at e corpor at ions b e est ab lish ed und er a sp eci al statu e in ord er to mak e it possible to incorporate in the constitutions necessary provisions in regard to majority control b y th e gov ern ment , gu ar ant eed b y th e S t at e gov ern ment in r eg ard to th e p ayment pr in cip al . In ord er t o i mpl ement t h e vi ew s Expr ess ed b y th e St at e gov ern ments th e St ate Fin an ci al Corpor at ion b ill w as introdu ced in th e P arl i ament . State Financial Corporations have been established under the Financial Corporation Act, 1951. At present there are 18 SFCs operating states as per list given in Appendix 9.I State Financial Corporation,, provide long term finance for setting up of the smaller projects within their region. The State Financial Corporations (SFCs), operating as development are state level financial institutions, playing a crucial role in the level small and medium enterprises in the states in tandem with the national. The SFCs provide financial assistance by way of term loan, subscription to equity/debentures, guarantees, discounting of bills of and seed/special capital. The SFCs operate a number of schemes of and equity type assistance on behalf of IDBI/SIDBI, in addition to the schemes for artisans, and special target groups such as SC/ST, women, ex-servicemen and physically handicapped. The SFCs (Amendment) Act, 2000 which became effective in 2000, provide greater flexibility to the SFCs to cope with the challenges by the deregulated financial system.

Refinance is also provided for promotional and infrastructural support activities conducive to the development of tiny rural industries. NABARD refinance is available for setting up of new units and for modernisation/ renovation/ expansion/ diversification of existing units. Over a period of

time, a number of schemes have been evolved and suitably modified from time to time.

8. Please tell me more about SIDBI's General Refinance Scheme? SIDBI operates the General Refinance Scheme through primary lending institutions, such as Commercial Banks, State Financial Corporations, State Industrial Development Corporations, etc. The assistance is extended for activities in the small scale sector and tiny sector. The proposals are extended assistance by the primary lending institutions if they satisfy the norms specified under the Scheme and SIDBI extends refinance assistance, in turn, to the PLIs.