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Financial System 237
Capital
State Finance Corporations will have a paid up capital from Rs. 50 lakhs to Rs. 5 crore
which will be contributed by the respective state government, Schedule Commercial Bank,
Reserved Bank of India and various financial institutions.
Objectives
• To provides financial assistance to Small scale industries
• To promote tiny, village and cottage Industries
• To provides infrastructure facilities to SSI
Functions
• Long term loans to Small Scale Industries.
• Refinance from Reserve Bank of India and Industrial Development Bank of India
• Assistance from International Development Agency (IDA) and foreign currency
hire of credit from the IDBI
Management
State Finance Corporation are managed by Board of directors constituted by the respective
State Government, Central Government, Reserve Bank of India, Schedule Commercial
Bank and Financial Institutions as nominated directors to the State Finance Corporation.
STATE FINANCE CORPORATION IN TAMIL NADU
The Madras Industrial Investment Corporation (MIIC) was started as early as 1949, under
the companies act and it was renamed as Tamil Nadu Industrial Investment Corporation
(TIIC). It was the first State Finance Corporation in India, after the establishment of the State
Finance Corporation Act, 1951, the first State Finance Corporation was in Punjab in 1953.
EXPORT IMPORT BANK (EXIM BANK)
Origin
EXIM bank was set up in January 1982 as a wholly owned by the central government.
Capital
EXIM bank was established with the paid up capital of Rs. 50 crores. It is empowered from
RBI and also from central government to further capital raise by issue of bonds and grants
from government.
Objectives
EXIM bank was established mainly for the purpose of promoting export and trading in
India. The objectives are as follows:
• To promote the export and import activities
• To meet the financial requirements of the exporters
• To provides guarantee and make foreign exchange facilities to exporters.