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August 26, 2014

State Financial Corporations (SFCs) : Functions and Critical Review

104 comments

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In order to meet the financial needs of small and medium scale industrial units which are not governed by Industrial Finance Corporation, the Government of India passed State Finance Corporation Act in 1951, empowering the State Governments to start financial corporations. The First State Financial Corporation was set up in Punjab in the year 1953. At present there are 18 SFCs operating in the country.

Functions of SFCs

Following are the various functions of SFSs
  1. Financial Assistance to Small Units : The main function of State Finance Corporations is to provide long term finance to small and medium scale Industrial concerns formed as public or private limited companies, corporations, forms or proprietary concerns repayable with in a period of 20 years.
  2. Guaranteeing Loans : The SFCs guarantee loans raised by industrial concerns from commercial banks and cooperative banks repayable within a period of 20 years.
  3. Subscription and Underwriting : The State Finance Corporations subscribes to the debentures issued by the industrial concerns repayable within 20 years and also underwrites the issue of stock, shares, bonds and debentures of industrial concerns.
  4. Guarantee for deferred Payments : They guarantees the deferred payments for the purchase of plant, machinery etc within the country.
  5. Acting as Agent of Central and State Governments : They act as an agent of the central or state governments or some industrial financing institutions for sanctioning and disbursing loans to small industries. 
  6. Capital : The share capital of the SFCs is fixed by the concerned state government subject to the minimum of Rs. 50 lakhs and maximum of Rs. 5 crore. The shares are subscribed by the State Government, RBI, Commercial Banks, Co-operative banks, other financial institutions and the public.

List of SFCs in India

  1. Andhra Pradesh State Financial Corporation
  2. Assam Financial Corporation 
  3. Bihar State Financial Corporation
  4. Delhi Financial Corporation
  5. Haryana Financial Corporation
  6. Gujarat State Financial Services Ltd.
  7. Hirnachal Pradesh Financial Corporation
  8. Jammu & Kashmir State Financial Corporation
  9. Jammu & Kashmir State Financial Corporation
  10. Kerala Financial Corporation
  11. Madhya Pradesh Financial
  12. Maharashtra State Financial
  13. Orissa State Financial
  14. Punjab Financial Corporation
  15. Rajasthan Financial Corporation
  16. Tamil Nadu Industrial
  17. Uttar Pradesh Financial Corporation
  18. West Bengal Financial Corporation

Critical Review

The functioning of State Finance Corporations has been criticized mainly because of the following drawbacks.
  1. Concentration only on Granting Loans : Concentration only on sanctioning of loans and advances even though they can subscribe to the debentures and underwrite shares and debentures issued by the units. Therefor,e there is a need for reorientation of the lending policy.
  2. Failed to Achieve Regional Balanced Growth : State Finance Corporations have failed to bring about a regional balanced industrial growth. It is observed that there has been uneven development of industries with State Finance Corporations assistance in different states and regions.
  3. Bias in Favor of Large Unites : State Finance Corporations shown a bias in favor of financing large scale units rather than to small scale units. 
  4. Higher Rate of Interest : High rate of interest and hard terms and conditions for assistance is another criticism against the operations of SFCs.
  5. Problem of Overdues : Most of the SFCs are facing the serious problem of continuous increasing magnitude of overdues due to delay in implementation of projects.
  6. Lack of Technical Staff : Lack of adequate specialized technical and trained staff for efficient working.
  7. Lack of Self Sufficient Organizational setup : The SFCs lack self-sufficient organizational set up along with adequate specialized and trained staff ensuring their efficient functioning.
  8. Limited Resources : The financial resources of the SFCs are limited and inadequate. They are facing problem of attracting more funds. 
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104 comments:

  1. Hai mam, can you plz provide updates on Agriculture information.

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  2. Working on it friend. You will get it in two days

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  3. Bhoomi heen kisa through NABARD..not by RBI..

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  4. IAM NOT ABLE TO DOWNLOAD PRE TRAINING CALL LETTER ....CATEGERY GENERAL , .......IT SHOWS INVALID LOGIN......PLEASE HELP ME ....

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  5. thanx for ur reply roshani :)

    i have a question.... was there any option of choosing any one section between hindi section(40 marks)

    and english section(40 marks) AT THE TIME OF FILLING UP THE APPLICATION FORM ?

    because that would mean that person who has already opted for english section can not attempt the hindi section instead of english section if she wants to.

    (ps: i m talking about hindi and english sections (40 marks each) not languages )

    thanx again :)

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  6. wen will the sbi po result cme???

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  7. Corrected it friend. Thanks for the update

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  8. Edimburg University Honoured Dr.APJ Abdul Kalam with a Doctorate for his contributions in -----------------SCIECNE & TECHNOLOGY (on 16-8-2014 morning session paper)

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  9. can you plz provide updates on Agriculture information in that quick reference guide

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  10. My name is very common..... there are more than 100 finding results....

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  11. SIR/MADAM when our result of SBI PO will declear??

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  12. Will the cut off be same for all days?
    I feel it was tough this day..

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  13. thank u team

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  14. end of september or starting of october

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  15. Thanks so much for all the work you are doing. Visiting your website has been very resourceful.

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  16. What is the syllabus for ssc stenographers ? Could someone tell me

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  17. End of Oct or starting of Nov

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  18. IAM NOT ABLE TO DOWNLOAD PRE TRAINING CALL LETTER ....CATEGERY SC , .......IT SHOWS INVALID LOGIN......PLEASE HELP ME

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  19. very informative... thanks

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  20. WHEN WILL YOU KEEP A LINK FOR IBPS AND RBI ASSISTANTS

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  21. respected sir/ mam..

    i have a question.... was there any option of choosing any one section between hindi section(40 marks)

    and english section(40 marks) AT THE TIME OF FILLING UP THE APPLICATION FORM ?

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  22. thank you so much @Gr8AmbitionZ

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  23. Harikrishna PrasadAugust 27, 2014 at 4:04 PM

    plz up load 23& 24th also my exam was 30th plz mam

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  24. Thank u so much :-) Rocking :-)

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  25. kindly change the governors list or else guys vl b in trouble......................

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  26. Hi, Please add the Syllabus for CWE RRB Office Assistant and also give wt are the topics are to be important

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  27. check properly for the register number..make sure that you have entered the correct REGISTER NUMBER and NOT RRB clerk or something else

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  28. mem this material spacially grammer is sufficient or not

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  29. Thnx a lot bt plz do provide imp ques on economic survey also

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  30. thanks ,,,,, Gr8AmbitiomZ,,,,,,,,,GREAT WORK

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  31. which state leads in employment generation? qs asked on 23rd aug . plz provide answers

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  32. nice work team .love ya

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  33. thanks for good material

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  34. Its really helpfull for banking exam

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  35. iam unable to dowmload my hall ticket of CWERRB OFFICER SCALE I....guys help me please

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  36. satya narayan mishraAugust 31, 2014 at 4:45 PM

    scale2 me professional knowledge m kya ayega......plz tell me

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  37. satya narayan mishraAugust 31, 2014 at 4:47 PM

    Hii Mam plz upload the paper of 2013 officer scale 2 ...................

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  38. iam not able to download my hall ticket for rrb officer scale 1....plz help me...guyz,,,,,,,,,,,,,,,,,,bobb

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  39. no such opn ..u can attempt any which u want to.

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  40. kya isme 31-08-14 evening shift ka va question adad hai

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  41. plz add gk questions of 24th and 31st august 2014

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  42. Really thank u maam for both posting both file...

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  43. good morning all of you

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  44. uploading for this material is very-2 best, so lot of thanks!

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  45. gr8 gmbitionz team is really doing great job........@@ thanku guys...

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  46. Can anybody upload general awareness questions for ibps rrb office scale I .. please

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  47. very useful website for students

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  48. thank you so much

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  49. really its good job...... thanks gr8 ambition team...

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  50. Hi friends,
    If any of you know about the sectional format for

    INFORMATION TECHNOLOGY OFFICER SCALE-I I (RRB) exam.
    Plz provide: name of section, nos of questions, marks, total time.
    my exam date : 13 sept 2014.

    Thanks in advance.
    subhodip
    voice : 9800106681
    subhodip.csit@gmail.com

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  51. IS THIS THE RIGHT FORMAT FOR INFORMATION TECHNOLOGY OFFICER SCALE-I I (RRB) exam.
    PLZ CORRECT ME IF I AM WRONG.

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  52. This post is from July 2012. will the contents be updated or not ? Any latest updates ??

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  53. Your Well-wisher !!September 5, 2014 at 3:13 PM

    All the best to all those who are having their RRB PO exam tomorrow onwards

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  54. Are these gonna be repeated in upcoming IBPS exam?

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  55. they hv asked capital of libiya

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  56. thanks...from d bottom of my heart....!!!!!!!!!!!

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  57. Very nice work. Very grateful to you sir

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  58. Is this enough for upcoming RBI assistant exam???...plz write about synonyms

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  59. Yah this is old one...is this enough for RBI assistant exam 2014?

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  60. @LAXMI and @Ashvija Raj They started posting it on July 2012 and keep on updating it with new topics... and waisebhi English is not like Current Affairs. So it wont get outdated. So no need to be worried.

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  61. Hello Mam Good Work And Carry On This Work...

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  62. can u say me what kind of topics have to prepare for group discussions

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  63. hello mam i need your help i m preparing for ibps po 2014 .i m facing problem in the error detection section and in passage .plz suggest me how i score more in this sections

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  64. what is the minimum number question to be attended in each section in ibps po IV?

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  65. very good works carry on it. thankx

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  66. shivani ............make a gud wesite frist..this very fustrating..me advertising

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  67. whats the formula for 4,5,6,...etc years....??

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  68. how helpful will the questionpapers of last 1o years prove in cracking IBPS-clerical examination 2014?

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  69. i just got to knw about dis site nd found it quite useful :)

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  70. which months should i prefer current affairs for ssc chsl exam held on nov 2,2014

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  71. mera room mat ka 110q atte kiya hi

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  72. hi... i want to take ssc cgl 2015, can you help me to prepare for this exam specially English and Gk.
    ....

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  73. hi... I want to take ssc cgl 2015 can you help me to prepare for this exam, specially English and Gk.

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  74. is this english material is enough to crack the bank exam?

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  75. mam i just wann a complete material of banking awareness and GK in one PDF formate.....for this ibps clerks exams...Like one sentence objective types.....before this you give a lot of questions about current affs..So plz mam send that soon..that was very easy for us.....A Gr8 thanks to you for this helping....
    Mam plz tel me how I can download the total shortcuts of english n apti n gk....
    Just want to know how I should prepair for this ibps clerk exams....How I increse my accuracy in math n english....just help me out...n tel me which month should i prefer Gk for upcoming ibps exams......thanks a lot mam....m waiting yr reply....

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  76. @Praveen kumar
    would you please tell this C.I. formula for the 4years ....

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  77. mam plz help me....just need a help in eng section in error detection.....just need a 1 pdf file in all shortcuts......thanks

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  78. mam please provide how to get marks in cloze Test in English please guide me

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  79. Hi mam I have problem in English section as am from Telugu medium background could u plz tell me step by step to score good marks in English section and am very poor in vocabulary.Thanks for u r effort.

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  80. plz provide r-s-aggrawals-objective-english-pdf

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  81. hello friens i am rajan...agar aap free recharge chahte ho to http://mcent.com/r/PFJYH2 is link pe click karke mcent download kare ya computer par register kare.apko apps download karne ke pese milenge and har ek friend ko invite karne ke 100 rs...agar aap sidha playstore se download karenge to apko sirf 50 rs milenge share karne ke..yeh app fake nhi hai aap google par v check kar sakte ho...aap ek bar trust karke app download kare aap niraash nhi honge trust me agar app fake nikli to chaye jitni marji galian nikalna...muje koi btane wala nhi tha isliye mai aap sabko bata ra.ha hu apko kabhi recharge karne ki jarurat nhi padegi......happy new year may god bless you

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  82. thank u mam, thanks 4 the work and support

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  83. This site is too good.

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  84. C.I. formula for the 4years

    4 years Same as 3 years as

    Suppose 100000 Rs rate 10% and Time 4 years.Now CI?

    Step 1st- 100000 ka 10%= 10000*4=40000
    Step 2nd- 40000 ka 10% = 4000*3= 12000
    Step 3rd- 12000 ka 10% = 1200*2 = 2400
    Step 4th- 2400 ka 10%= 240*1= 240



    Total :- Ans : 54640



    Thanks and Regards
    Varun Bansal :)

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  85. please help only english no others for me

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  86. you have to follow from one month before the exam...

    http://jobcracker.tk/

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  87. how should i prepare for technical part of IT officer..

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  88. Mam plz post simple , compound , complex sentences wit explanation nd exampls

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  89. i want english meterial in ms-word or pdf formet please......i am qualify and good marks in all subjects but not qualify in english subject . so give english meterial pleassssssssssssssssss

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  90. sir please suggest me for English . how can i improve my English.

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  91. mam, plz provide NICL AO exam material and specially gk material..

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