E.C. Meeting of COSIDICI : 

The Executive Committee Meeting of COSIDICI was held on 31.05.2001 at Manali. During the course of deliberations the Executive Committee of COSIDICI had expressed serious concern on the future prospects of SFCs in view of the deregulation of the financial sector and resultant competition which they had to face from commercial banks in the field. Inspite of the amendments to the SFCs Act and recommendations of the Gupta Committee on restructuring of SFCs, it was felt that a level-playing field has been denied to SFCs as their cost of funds was very high as compared to that of commercial banks. Also SIDBI's refinance rate is high as compared to that of other developmental financial institutions leaving SFCs with a very small margin to operate. In addition, SIDBI has been reducing the refinance limit and has not shown any response towards the request of SFCs for relaxing eligibility norms of the borrowing units in terms of owned funds (exceeding Rs.10 crore) thus depriving them from entertaining good medium scale units for financing. SFCs also were feeling ignored by the Government of India which did not take them into consideration while formulating national policy for small scale industry. The Executive Committee, therefore, resolved that a delegation from COSIDICI may meet the Secretary (Banking) in the month of July 2001 and place before him a detailed memorandum highlighting the major issues adversely affecting the functioning of SFCs and seek his intervention in the matter. It was also proposed that Secretary (B) may be requested to invite, Chairman & Managing Director, SIDBI to attend the proposed meeting. The E.C. further resolved to prepare a `Status Paper' incorporating the various issues to be identified for discussion at the said meeting. A sub-committee comprising of (i) Smt. Sharwaree Gokhale, MD, MSFC; (ii) Shri J.P. Goshi, MD, GSFC; (iii) Shri S.K. Sen, MD, WBFC; (iv) Smt. Upma Choudhary, MD, HPFC; (v) Shri Som Parkash, MD, PFC was constituted with Shri K.K. Mudgil, Secretary General, COSIDICI as convenor to prepare the paper. The E.C. desired that Secretary General may write to all SFCs inviting their views for preparing the `Status Paper' and the same may be considered by the Sub-Committee while preparing the paper. The E.C. also resolved that the above sub-committee would examine the Prudential Norms introduced in SFCs by IDBI/SIDBI. As these norms are based on the norms for banks and not entirely relevant to the operations of SFCs the sub-committee was asked to make suggestions for making relaxations in these norms. 
While the necessary preparations for meeting the Secretary (Banking) were in progress it was learnt from various press reports that Government of India had turned down the proposal to provide recapitalisation of Rs.3,200 crore to the sick SFCs. This matter was brought to the notice of the then President, COSIDICI, Smt. Yasmin Ahmed who suggested that a special meeting of the Executive Committee to discuss the matter in its proper perspective may be convened on June 25, 2001 at New Delhi and a suitable strategy be drawn for holding discussions with the Minister of State for Finance, Shri Balasaheb Vikhe Patil. This meeting was postponed to 20.07.2001. Secretary General met with officials of the Finance Ministry on 12.06.2001 and was assured of a date for a meeting with the Minister of State in the near future. E.C. further decided that a meeting with CMD, SIDBI be held after the meeting with Secretary (Banking) to resolve the operational problems being faced by SFCs. 

Training : 
The E.C. deliberated upon the proposal for making permanent arrangements for providing training to the officers of SLFIs at College of Agricultural Banking, RBI, Pune. Providing need based training programmes to officers of SLFIs has been the main focus of attention of COSIDICI for the past two years. The Principal of the above college had agreed to structure the training module keeping in view the requirements of our members. The college would charge a fee of Rs.8,000/- per week and trainees would be provided single room with attached toilet accommodation in the hostel . The E.C. resolved to approve the proposal on a long term basis. The college was requested to include four programmes i.e. 2 in each category (one for Junior level and one for Senior level Managers) in their calender for the year 01.07.2001 to 30.06.2002. The E.C. desired that COSIDICI may circulate the details of the training programme received from CAB, Pune among the Member Corporations for deputing their officers for training. The E.C. further resolved to request SIDBI for subsidising the training of officers of SLFIs at CAB, Pune. The course content has been finalised and will be circulated among Member Corporations shortly. Shri P.B. Nimbalkar, CMD, SIDBI has been requested for provision of subsidy for training of officers of SLFIs. Reply is awaited. 

Diversification of Business Profile of SLFIs 
As mentioned in the March-April 2001 issue of COSIDICI COURIER, COSIDICI had suggested the following two proposals for consideration by SLFIs to diversify their loan portfolio and improve profitability : 
· SIDCs may set up Housing Finance Subsidiary to provide housing loans to individuals, institutions and government employees in their respective states. 
· Undertake marketing of Insurance products of Life and General Insurance Companies as Corpoate Agents. 
After a great deal of discussion the E.C. resolved that the individual corporations may discuss the proposal in the meeting of their Board of Directors and take their own decision in the matter and keep COSIDICI informed. 

Section 29 of the SFCs Act 1951 ~ Disposal of assets taken over by SFCs/SIDCs 
The Executive Committee appreciated the proposal of MD, MSFC that the properties taken over by SFCs by invoking Section 29 of the Act for sale may be put on the Website of COSIDICI for wider publicity. COSIDICI has already received the list of such units from some of our Member Corporations. Some of the lists have already been put on COSIDICI website. The others are under process. COSIDICI is also in correspondence with some of the leading Chambers of Industry viz. FICCI & CII to circulate these lists, for giving wide publicity, amongst their members.