State Financial Corporations Act, 1951
4. Share capital and shareholders
(1) The authorized capital of the Financial Corporation shall be such sum as may be fixed by the State Government in this behalf, 2[but it shall be less than fifty lakh of rupees or exceed fifty crores of rupees:
PROVIDED that the Central Government may, on the recommendation of the Development Bank, by notification in the Official Gazette, increase the authorized capital up to one hundred crores of rupees.]
2[(2) The authorized capital shall be divided into such manner of fully paid up shares of the same face value and shall be issued to the parties mentioned in sub-section (3) at such times and in such manner as the State Government may, by notification in the Official Gazette, determine:
PROVIDED that no such notification shall be necessary when the shares are to be issued to the parties mentioned in clauses (a) and (ba) of sub-section (3).
(3) The State Government shall, with the approval of the Central Government, determine the number of share which may, respectively, be distributed among-
(a) the State Government,
(b) the Reserve Bank,
(ba) the Development Bank,
(c) scheduled banks, insurance companies (including the Life Insurance Corporation of India established under section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956)], investment trusts, co-operative banks, 2[other financial institutions or such other institutions as the Central Government may notify in this behalf in the Official Gazette], and
(d) parties other than those referred to in clauses (a), (b), (ba) and (c):
PROVIDED that the number of shares which may be allocated to the parties referred to in clause (d) shall in no case exceed twenty-five per cent of the total number of shares.
(4) Subject to the other provisions contained in this section, the allocation of shares among the parties referred to in clauses (c) and (d) of sub-section (3) and the allotment of such shares shall be made by the Financial Corporation in such manner as may be prescribed.
2[(5) If any shares allocated to any of the parties referred to in clause (c) and (d) of sub-section (3) remain unsubscribed, they shall be subscribed for equally by the State Government and the Development Bank.]