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State Financial Corporations Act, 1951

3A. Establishment of Joint Financial Corporations

(1) Notwithstanding anything contained in section 3, two or more States may, after consultation with the Development Bank, enter into an agreement that there shall be one Financial Corporation for the group of States participating in the agreement and if the agreement is published in the Official Gazette of each of those States, the Central Government may, by notification in the Official Gazette, establish a Joint Financial Corporation to serve and needs of those States under such name as may be specified in the notification.

(2) An inter-State agreement under sub-section (1) among the participating States may-

(a) provide for the fixation of the authorized capital of the Joint Financial Corporation, the number of fully paid-up shares into which it shall be divided and the allocation among the participating States of the shares to be distributed under clause (a) of sub-section (3) of section 4;

(b) provide for the sharing of the liability for the guarantee under section 6 or section 7 or section 8;

(c) provide for the number of Directors to be nominated to the Board by each participating State Government;

(d) provide for the apportionment among the participating States of expenditure in connection with the Joint Financial Corporation;

(e) [Omitted by Act No. 43 of 1985]

(f) determine which of the participating State Governments shall exercise the several functions of the State Government under this Act, and references in this act to the State Government, in relation to the Joint Financial Corporation, shall save as otherwise expressly provided, be construed accordingly;

(g) provide for consultation among the participating States either generally or with reference to particular matters arising under this Act;

(h) make such incidental and consequential provisions, not inconsistent with this Act, as may be deemed necessary or expedient for giving effect to the agreement.

(3) The Joint Financial Corporation shall be a body corporate by the name notified under sub-section (1), having perpetual succession and a common seal, with power, subject to the provisions of this Act, to acquire, hold and dispose of property and shall by the said name sue and be sued.

(4) Any reference in this Act to "State" in relation to a Joint Financial Corporation established for two or more States, shall be construed as a reference to each such State.

State Financial Corporation Act, 1951 Back

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