Haryana floats NBFC for mgmt of surplus funds

Vijay C Roy

Tribune News Service

Chandigarh, February 20

For managing surplus funds of public sector enterprises and state departments, the Haryana government will float a non-banking financial corporation (NBFC) in the next fiscal. The government has already submitted application in the regard to RBI and awaiting its nod to commence operations.

The state government has already incorporated Haryana State Financial Services Limited (HSFL) as a limited company under the Companies Act with an authorised capital of Rs 10 crore and a paid-up capital of Rs 2 crore.

Authorised capital is the maximum amount of the capital for which shares can be issued by a company to the shareholders while paid-up capital is the amount for which shares of the company were issued to the shareholders and payment was made by the shareholders.

At any point of time, paid-up capital will be less than or equal to authorised share capital and the company cannot issue shares beyond the authorised share capital of the company.

“NBFC namely Haryana State Financial Services Limited will soon commence operations. It will try to maximise the yield on funds and also will give loan to public sector enterprises,” said TVSN Prasad, Additional Chief Secretary, Haryana, at a recently held bankers’ meeting.

Currently, state departments or public sector enterprises park their surplus funds with different banks. After the formation of the NBFC, the entire fund management will be centralised. Since the entire process is streamlined, it will result in centralised mechanism for prudent management of funds under the overall control and supervision of General Administration Department.

According to a senior official in Haryana government, the NBFC will help the state government in providing better deposit rates to the state government entities.

According to information, the NBFC would also enable quick and hassle-free lending and create financial discipline among the state’s public sector enterprises and various departments.

Once accorded approval, the company will deposit and lend money to the state government bodies such as municipal body, wholly owned or semi-owned bodies of the state government.

It will also carry on the business of a finance company and provide short or long-term loans to the state government entities. It is believed that it will receive grants, loans and advances from the state government, banks, financial institutions, companies, trusts, cooperative societies and other financing agencies.

Haryana State Financial Services Ltd

• Authorised capital: Rs 10 crore

• Paid-up capital: Rs 2 crore

• Purpose: Management of surplus funds