law: State Financial Corporations Act, 1951 
  25. Business which Financial Corporation may transact 
  (1) The Financial Corporation may subject to the provisions of
  
  this Act, carry on and transact any of the following kinds of business,
  
  namely,-
  (a) guaranteeing, on such terms and conditions
  
  as may be agreed upon,-
  (i) loans raised by industrial concerns which
  
  are repayable within a period not exceeding twenty years, and are floated in
  
  the public market;
  (ii) loans raised by industrial concern from
  
  scheduled banks or State co-operative banks 3[or other financial institutions];
  (b) guaranteeing, on such terms and conditions
  
  as may be agreed upon, deferred payments due from any industrial concerns in
  
  connection with its purchase of capital goods within India;
  (c) underwriting of the issue of stock,
  
  shares, bonds or debentures by industrial concerns;
  (ca) transferring for consideration any
  
  instruments relating to loans and advances granted by it to industrial
  
  concerns;
  (d) acting as agent of the Central Government
  
  or the State Government or the Development Bank or the Industrial Financial
  
  Corporation of India established under the Industrial Financial Corporation Act,
  
  1948 (15 of 1948), or any other financial institution notified in this behalf
  
  by the Central Government in respect of any matter connected with, or arising
  
  out of, the grant of loans or advances to an industrial concern, or
  
  subscription to debentures of an industrial concern] 3[or relating to the
  
  business of the Development Bank, Industrial Financial Corporation of India or
  
  financial institution];
  2[(da) subscribing to, or purchasing of, the
  
  stock, shares, bonds or debentures of an industrial concern or any other
  
  concern with the prior approval of the Development Bank;]
  (e) receiving in consideration of the services
  
  mentioned in the preceding clauses such commission as may be agreed upon;
  2[(f) retaining as part of its assets any
  
  stock, shares, bonds or debentures which it may acquire by subscription or in
  
  fulfillment of its underwriting liabilities and disposing of the stock, shares,
  
  bonds or debentures so acquired;]
  (g) granting loans or advances to, or
  
  subscribing to debentures of, an industrial concern, repayable within a period
  
  not exceeding 20 years from the date on which they are granted or subscribed
  
  to, as the case may be:
  13[PROVIDED that the Financial
  
  Corporation may, with the prior approval of the Development Bank, exceed the
  
  said limit of twenty years up to a further period of ten years:
  PROVIDED FURTHER that nothing contained
  
  in this clause shall be deemed to preclude the Financial Corporation from
  
  granting loans or advances to, or subscribing to debentures of, an industrial
  
  concern to which may be attached an option to convert such debentures or loans
  
  into stock or shares of the industrial concern:
  14[PROVIDED ALSO that] the Financial
  
  Corporation may, in the exercise of such option 15[convert the amounts
  
  outstanding on such debentures or loans] into stock or shares of the industrial
  
  concern and may also subscribe to stock or shares of the industrial concern if
  
  such concern increases its subscribed capital by the issue of further stock or
  
  shares in accordance with, and subject to, the provisions of section 81 of the
  
  Companies Act, 1956 (1 of 1956).
  3[Explanation :In this clause, the
  
  expression "the amounts outstanding on such debentures or loans"
  
  shall means the principal, interest and other charges payable on such
  
  debentures or loans as at the time when the amounts are sought to be converted
  
  into stock or shares;]
  3[(ga) accepting or discounting promissory
  
  notes and bills of exchange made, drawn, accepted or endorsed by industrial
  
  concerns or by any person selling capital goods manufactured by one industrial
  
  concern to another industrial concern;
  (gb) undertaking research and surveys for
  
  evaluating or dealing with marketing or investments and undertaking and
  
  carrying on techno-economic studies or other activities in connection with the
  
  development of any industry;
  (gc) providing technical and administrative
  
  assistance to any industrial concern or any person for the promotion,
  
  management or expansion of any industry;
  (gd) planning and assisting in the promotion
  
  and development of industries;
  (ge) doing such other business as the
  
  Development Bank may authorize;]
  (h) generally, the doing of such acts and
  
  things as may be incidental to, or consequential upon, the exercise of its
  
  powers or the discharge of its duties under this Act.
  (2) [Omitted by Act No. 43 of 1985]
  (3) Subject to the provisions of sub-section (5) of section 7,
  
  the aggregate of contingent liabilities of the Financial Corporation under
  
  clauses (a), (b), (c) and (ca) of sub-section (1) shall not at any time exceed
  
  twice the paid up share capital and reserve fund of the Corporation except with
  
  the prior approval of the State Government and in consultation with the
  
  Development Bank but in no case shall exceed thrice the paid up share capital
  
  and reserve fund of the Corporation.
  (4) Nothing contained in this Section shall entitle any
  
  Financial Corporation to hold shares in any company, whether as pledge,
  
  mortgagee or absolute owner, of an amount exceeding thirty per cent of the
  
  subscribed share capital of that company or thirty per cent of its own paid up
  
  share capital and free reserves, whichever is less.
  (5) If, on the commencement of the State Financial Corporations
  
  (Amendment) Act, 1972 (77 of 1972), any Financial Corporation is holding shares
  
  in excess of the limits specified in sub-section (4), the Corporation shall
  
  report the matter forthwith to the Reserve Bank and shall, within such period
  
  as the Reserve Bank may allow, so reduce its share holding as to conform to the
  
  provisions of that sub-section.