REGIONAL DEVELOPMENT BANKS
Besides the all-India financing institutions, there are State financial institutions also, which may be designated as Regional Development Banks. These institutions grant assistance to industrial units located within their own State/States.
STATE FINANCIAL CORPORATIONS
At present 18 State Financial Corporations are functioning. Except the Tamil Nadu Industrial Investment Corporation, which was set up as a joint stock company in 1949, all other Corporations have been set up under the State Financial Corporations Act, 1951. The SFCs are the State level agencies established for the development of small and medium industrial units within their respective States. Thus, they pro¬vide loans and underwriting assistance to industrial units having paid-up capital and reserves not exceed¬ing Rs. 1 crore. The maximum amount that can be sanctioned to an industrial concern by SFC is Rs. 60 lakhs.
The Industrial Development Bank of India has made a significant contribution towards the share capital of the SFCs. Moreover, the SFCs depend upon the IDBI for refinance in respect of the term loans granted by them. Apart from the above, SFCs also resort to temporary borrowings from the Reserve Bank of India and borrowings from IDBI and by the sale of bonds.
