The Assam Financial Corporation (AFC) shares the pride of being a premier Financial Institution (FI) dedicated to the cause of Industrial Development in the North-East India. Having established in early 1954 (vide Notification No.FTC/55/51/988 dated 19th April, 1954 of Government of Assam) in pursuance to the provisions under a Central Act i.e. the State Financial Corporations Act 1951 (SFCs Act), the AFC was the second SFC in the country and first joint SFC covering under its operational jurisdiction the States of Assam, Meghalaya, Manipur & Tripura. 

Shri P. Basumatary, IAS is presently Managing Director of Assam Financial Corporation. His profile is given below : 

Name -

Date of Birth -

Post held -

Shri Patreswar Basumatary, IAS 

April 01, 1941 
Commissioner Sales Tax, Govt. of Assam, Guwahati 

- Commissioner Municipal Corporation, Guwahati 

- Member Personnel and Administration, 
Assam State Electricity Board, Guwahati 

- Managing Director, Assam Financial Corporation (till date) Guwahati 

As Deputy Commissioner of Golaghat District of Assam, Shri Basumatary was able to persuade the ULFA cadre to surrender alongwith arms to him on 07.04.1992. 

The President of India conferred on Shri Basumatary the 1971 census silver medal in recognition of his outstanding zeal and high quality services during census in the country. 

Jawaharlal Nehru Excellence Award for 1998 was conferred on Shri Basumatary by Global Economic Council, New Delhi for his outstanding contribution in the field of industry, business, public life, administration, social and educational services and culture. 

The activities and the performance of the corporation are as follows :-

The AFC has been assigned with the task of being the main purveyor of credit inflow through term lending assistance to SSI and MSI from FY 1954-55 and also limited working Capital to SSI from FY 1989-90 under Single Window Scheme (SWS). 

As a premier FI and development bank, AFC gives special attention to the backward districts to bring about balanced growth of industries in different states of its jurisdiction. Since its inception in 1954 till the end of March 1999 the Corporation has sanctioned Rs.104 crores to nearly 6062 industrial units. The major industrial sectors assisted by the Corporation include Industrial Metal Products, Coal and Petroleum Products, Chemical and Pharmaceutical Products, Printing, Publishing and Allied Products, Textile, Wood and Plywood, Paper Products, Furniture & Fixtures, Stone, Clay & Cement, Leather Products, Electrical & Electronic Products, Hotel Industry, Transport, Small Hospital and Nursing homes and different Handloom and cottage Industries. Besides, the corporation has been financing Tea Processing Industries from its very beginning. 

The Corporation, at present in addition to its Head office located at Guwahati, has 3 different Regional Offices, at Tezpur, Tinsukia and Bongaigaon and 11 Branches located in almost all the district Head Quarters of Assam and the capital towns of the other three States through which the operational activities of the Corporation are being carried out. 

Again, as a premier term lending industrial development institution of the region AFC has been acting as a catalyst for rapid industrialisation of the region and is endeavouring to work more actively in the twenty first century to bring about a balanced industrial growth. 

However, in the wake of economic liberalisation and financial sector reforms, the performance parameter of SLFIs and more particularly of SFC like AFC has undergone a radical change. Resultantly the overall operations of AFC have shown a declining trend during the last few years. Further the AFC has been faced with direct competition from commercial banks and other FIs including that of NEDFI in the matter of grant of financial assistance to entrepreneurs. The urgent task, therefore, is to restructure and re-capitalise AFC alongwith diversification of its activities to revive its past glory. 

Diversification Activities

The Corporation has been exploring scope for probable diversification of its activities. In this connection it is worth mentioning that the Govt. of Assam has already appointed AFC as a State Channelising Agency for operating the schemes of National Handicapped Finance and Development Corporation, Ministry of Social Justice and Empowerment, Govt. of India to cater to the needs of empowering the disabled and Handicapped persons. In addition, the National Horticultural Board, the Ministry of Agriculture, the Govt. of India has also agreed to appoint AFC as the channelising agency to implement their different schemes in Assam and North East. The Board has also approved a policy to finance a market complex cum hotel project. Similar other diversification proposals are also under consideration. 

Restructuring and Re-capitalisation

Generally speaking, inadequacy of share capital and cheaper rsources has posed a major structural constraint for AFC which was objected to cater to the industrial development in one of the most backward areas spreading over four states of the N.E. Region. 

In this context AFC has recently submitted a restructuring proposal to SIDBI and Goverment of Assam at the initiative of the Senior Officers of the Corporation with the able guidance of the Managing Director, Shri P. Basumatary, IAS. The salient points under the said restructuring proposal are highlighted below :- 

1. One time equity assistance to reach the level of full authorised capital i.e. Rs.100.00 crores against the present share capital of only Rs.12.42 crores. 

2. The gap in matching share capital contribution from IDBI to the tune of Rs.3.25 crores. 

3. The refinance operation from SIDBI to AFC to be revived. 

4. Reschedulement of entire refinance principal outstanding of IDBI and SIDBI with moratorium for repayment. 

5. Freezing of interest on rescheduled refinance principal during the period of moratorium till its full repayment. 

6. Govt. guarantee on the rescheduled refinance principal if so desired by SIDBI etc. 

In addition to the above the AFC will contemplate the organisational and administrative reforms in near future. The quality and productivity supported by neatly designed computerisation in organisational functioning together with revamping of the Branch network shall be the prime thrust in implementing the administrative and organisational reforms.