The Orissa government has sought Prime Minister Manmohan Singh?s intervention for the revival of the Orissa State Finance Corp (OSFC). Chief minster Naveen Patnaik has written a letter to Singh to this effect.
The OSFC revival is facing roadblock, as the Sidbi is reluctant to open the line of credit to it. ?We have almost finalised a revival package for the OSFC and are ready to sign an MoU with the Sidbi for the line of credit?, said state industries minister BB Harichandan. But, the OSFC is not able to start its refinancing activities, as the Sidbi is not coming forward to provide finance, he added.
The OSFC stopped refinancing from 2002 as the Sidbi had refused to support its activities. The corporation went bankrupt as its non-performing assets touched a level of 98%. The total loss was Rs 383 crore, while its financial liabilities stand at Rs 415 crore.
The corporation was in verge of closure as the state government had refused to accept a revival package prepared with consultation with the UTI Bank and Sidbi. However, the government later decided to revive it in view of huge investments coming to Orissa.
Recently, the state government prepared a Rs 254-crore package for the restructuring of the OSFC and expressed its willingness to sing an MoU with the Sidbi for opening the line of credit. The Sidbi, however, made it clear that it would not possible to provide finance to the OSFC till it turns pink.