ACTIVITIES OF COSIDICI
 
COSIDICI has been focusing its attention on the various problems and difficulties being faced by state-level financial institutions (SLFIs) and taking up these matters with the concerned authorities such as Government of India, RBI, IDBI, SIDBI, etc. With the ongoing economic reforms and deregulation of the financial sector, the Govt, of India. RBI, IDBI, etc. have been taking more about the all-India financial institutions and have not given any attention to the needs and aspirations of the SLFIs. Resultantly, the SLFIs are left alone to fend for themselves. These corporation are facing stiff competition from commercial banks and other financial institutions as a result of current move towards universal banking. COSIDICI had voiced the grievances of this sector to the various authorities and placed before them their problems:  
  
  • A note containing COSIDICI's views on the `Discussion Paper' issued by RBI on the recommendations of the Khan Working Group pertaining to SLFIs has been submitted to RBI and appears elsewhere in this issue.

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  • A delegation form CISIDICI had called on Shri G.P. Gupta, CMD IDBI,on 30th June, 1999, and placed before him the problems of the sector in a Memorandum highlighting the issues. A summary of the issues discussed appears separately in this issue.

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  • Earlier during the course of its meeting with the Governor, RBI, on 4th February, 1999, a COSIDICI delegation had urged that commercial banks be allowed to open a line of credit to the SLFIs for meeting their funds requirement at 1.5% below their prime lending rates. This matter has since been under the RBI's consideration. The Secretary General COSIDICI had a meeting also with the Chief General Manager, RBI, Rural Planning and Credit Department, on 1st July, 1999, to impress upon him the justification for the above stated demand. The meeting was fruitful and RBI is examining this matter in consultation with its Credit Planning Cell. It is earnestly hopes that positive results will emerge.

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  • Another COSIDICI delegation comprising Dr. D.C. Misra, IAS., President, Shri Man Mohan Singh IAS., Vice-President, and Shri D.M. Spolia, IAS., Member, Executive Committee, had called on Shri Anup Misra, Joint Secretary, Banking Division, Ministry of Finance, on 6th July, 1999. The meeting was sought specifically to impress upon government the need for setting up of High Power Committee to look into the problem of SLFIs, on the lines of one promised by the Governor, RBI, during the meeting with a COSIDICI delegation on 4th February, 1999 (vide (2) above). It was learnt that Govt. of India did not favour setting up of the said committee on the ground that amendment of SFCs Act was under the active consideration of the Government and this Amendment Bill was likely to be placed before the Parliament in the next Session. It was emphasised during the course of the meeting with Shri Anup Misra that amendment of the SFCs Act and constitution of the committee were two different matters and the proposed amendment to SFCs Act could not, apparently, address the issues which the committee was expected to look into. Other matters like the re-capitalisation of the State Financial Corporations and setting up of Settlement Advisory Committees in each SFC for the recovery of NPAs were also discussed during the meeting with Shri Misra.

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  • A meeting of the Editorial Board of COSIDICI COURIER was held under the Chairmanship of Dr. D.C. Misra, IAS., on 22nd July, 1999. The Board reviewed, in detail, the latest issues of COSIDICI COURIER and made several suggestions for making further improvements in its contents and get-up. The Editorial Board was also re-constituted by inducting Shri D.M. Spolia, IAS., MD DSIDC, as one of the members vice Shri K.M. Sahni.

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  • Secretary General, Shri K.K. Mudgil, had a meeting with Shri J.N.L. Srivastava, IAS., Special Secretary, Ministry of Agriculture, Govt. of India, on 16th August, 1999, to discuss with him the scheme formulated by Govt. of India through the National Horticulture Board for providing concessional finance/soft loan for the setting up of cold-storages/warehouses, etc. in the states. The said scheme, which has yet to be formally cleared by the Government, envisages providing 50% of the capital cost as loan by commercial banks/co-operative banks, 25% to be contributed by the beneficiaries and the remaining 25% to be given as back-ended subsidy. Since the scheme was intended to be implemented through the National Bank for Agriculture and Rural Development (NABARD), the SFCs (which have no linkage with (NABARD) were not being included in the list of eligible institutions for implementing the scheme. The Secretary General impressed upon Shri Srivastava the need for making SFCs eligible agencies for providing the above incentives. It was also pointed out that SFCs had acquired sufficient experience in appraising such projects and had been success- fully financing cold-storages in several states. It was, therefore, urged that the Ministry of Agriculture may issue necessary instructions to National Horticulture Board for involving SFCs along with other institutions for providing finance to cold-storages. Shri Srivastava suggested that the SFCs could avail of soft loan scheme of the Ministry of Agriculture for extending loans for the setting up of cold-storages and for that purpose he desired the Secretary General to meet the Executive Director of the National Horticulture Board and obtain the scheme from him for circulation among SFCs. 

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    SIDBI, on our request, had organised a training-cum-orientation programme from August 2, 1999 to August 10, 1999 for the Senior Officers of SFCs at Lucknow. The training programme was split up into two parts viz. Tier-I and Tier-II. Tier-I programme was for General Managers and DGMs of SFCs from 2nd to 8th August, 1999. Tier-II programme of SFCs and was a joint session with the participants of the Tier-I programme. The response from the SFCs was very encouraging. About 23 participants attended the Tier-I programme.