Haryana government plans to form NBFC for efficient management of funds

The Haryana government has decided to form a non-banking financial company (NBFC) – Haryana State Financial Services Limited – to act as an in-house treasury manager for efficient management of surplus funds of state public enterprises and autonomous bodies.
The decision was taken in Chandigarh on Tuesday at a meeting of the state cabinet.
“The NBFC will provide better deposit rates on overnight funds of state government entities. Besides, it would provide better deposit rates throughout the year to state government entities.
“It would also provide much better lending rates to state government entities than the banking industry,” state finance minister Abhimanyu said after the cabinet meeting, chaired by chief minister Manohar Lal Khattar.
The NBFC would enable quick and hassle-free lending and create financial discipline among the state government entities. It would also result in centralised mechanism for prudent management of funds under the overall control and supervision of the general administration department, he said.
It will be established as a limited company under the Companies Act and registered with the Reserve Bank of India as an NBFC.
The authorised capital of the company will be Rs 10 crore and the paid up capital will be Rs 2 crore in the first instance.
The entire equity of the company will be held by the state government while the general administration department will be its administrative department.
The company will lend money, accept deposits and provide financial assistance with or without security to the state government, a body corporate, government company, state or municipal body, local body, wholly or partly owned by the government.
The chief secretary will be the chairman of the company, whereas administrative secretaries of finance, cooperation, power, industries, agriculture, town and country planning and urban local bodies departments will be other ex-officio directors.
The minister added that to check the increasing number of wilful financial irregularities and frauds committed by chit fund companies and protect the interests of small investors, the Haryana government has decided to frame the Haryana Chit Fund Rules, 2018 to provide a mechanism for effective implementation of the Chit Fund Act, 1982.