State Financial Corporations Act, 1951
8. Deposits with the Financial Corporation
(1) The Financial Corporation may accept from the State
Government or, with the prior approval of the State Government, the Development
Bank and the Reserve Bank, a local authority or any other person deposits
repayable after the expiry of a period which shall not be less than twelve
months from the date of the making of the deposit and on such other terms as it
thinks fit:
2[PROVIDED that the total amount of such deposits shall
not exceed twice the paid up share capital of the Financial Corporation:
PROVIDED FURTHER that the Central Government may permit the
Financial Corporation to accept deposits up to a higher limit not exceeding ten
times the paid up share capital of the Financial Corporation.]
2[(2) Any deposit accepted under sub-section (1), other than a
deposit from the State Government shall, if so required by the Financial
Corporation, be guaranteed by the State Government as to the repayment of the
principal and the payment of interest.]