1. Short title, extent and commencement.—(1) This Act may be called the State Financial
Corporations Act, 1951.
(2) It extends to the whole of India 2***.
(3) It shall come into force in any State on such date3
as the Central Government may, by notification
in the Official Gazette, appoint.
2. Definitions.—In this Act, unless the context otherwise requires,—
(a) “Board” means the Board of directors of the Financial Corporation;
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[(aa) “Development Bank” means the Industrial Development Bank of India established under
the Industrial Development Bank of India Act, 1964 (18 of 1964);]
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[(b) “Financial Corporation” means a Financial Corporation established under section 3 and
includes a Joint Financial Corporation established under section 3A;]
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[(c) “industrial concern” means any concern engaged or to be engaged in—
(i) the manufacture, preservation or processing of goods;
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[(ii) mining or development of mines;]
(iii) the hotel industry;
(iv) the transport of passengers or goods by road or by water or by air 8
[or by ropeway or by
lift];
(v) the generation or distribution of electricity or any other form of power;
(vi) the maintenance, repair, resting or servicing of machinery of any description or vehicles
or vessels or motor boats or trailers or tractors;
(vii) assembling, repairing or packing any article with the aid of machinery or power;
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[(viii) the setting up or development of an industrial area or industrial estate;]
(ix) fishing or providing shore facilities for fishing or maintenance thereof; 10***
1. This Act has been extended to Dadra and Nagar Haveli by Reg. 6 of 1963, s. 2 and the First Schedule; to Pondicherry by Reg.
7 of 1963, s. 3 and the First Schedule; to Goa, Daman and Diu by Reg. 11 of 1963, s. 3 and Schedule and to the State of
Sikkim on 24th October, 1975, vide notification No. S.O. 615(E), dated 23rd October, 1975.
2. The words “except the State of Jammu and Kashmir” omitted by Act 62 of 1956, s. 2 and the Schedule.
3. 1st August, 1952 (in the whole of India except the State of Jammu and Kashmir), vide notification No. S.R.O. 1317, dated 28th
July, 1952, see Gazette of India, Part II, sec. 3.
4. Ins. by Act 77 of 1972, s. 2 (w.e.f. 30-12-1972).
5. Subs. by Act 56 of 1956, s. 2, for clause (b) (w.e.f. 1-10-1956).
6. Subs. by Act 77 of 1972, s. 2, for clause (c) (w.e.f. 30-12-1972).
7. Subs. by Act 43 of 1985, s. 2, for sub-clause (ii) (w.e.f. 21-8-1985)
8. Ins. by s. 2, ibid. (w.e.f. 21-8-1985)
9. Subs. by s. 2, ibid., for sub-clause (viii) (w.e.f. 21-8-1985).
10. The word “or” omitted by s. 2, ibid. (w.e.f. 21-8-1985).
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[(x) providing weigh bridge facilities;
(xi) providing engineering, technical, financial, management, marketing or other services or
facilities for industry;
(xii) providing medical, health or other allied, services;
(xiii) providing software or hardware services relating to information technology,
telecommunications or electronics including satellite linkage and audio or visual cable
communication;
(xiv) setting up or development of tourism related facilities including amusement parks,
convention centres, restaurants, travel and transport (including those at airports), tourist service
agencies and guidance and counselling services to the tourists;
(xv) construction;
(xvi) development, maintenance and construction of roads;
(xvii) providing commercial complex facilities and community centres including conference
halls;
(xviii) floriculture;
(xix) tissue culture, fish culture, poultry farming, breeding and hatcheries;
(xx) service industry, such as altering, ornamenting, polishing, finishing, oiling, washing,
cleaning or otherwise treating or adapting any article or substance with a view to its use, sale,
transport, delivery or disposal;
(xxi) research and development of any concept, technology, design, process of product,
whether in relation to any of the matters aforesaid, including any activities approved by the Small
Industries Bank; or
(xxii) such other activity as may be approved by the Small Industries Bank;]
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[Explanation 1].—The expression “processing of goods” includes any art or process for producing,
preparing or making an article by subjecting any material to a manual, mechanical, chemical, electrical or
any other like operation.
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[Explanation 2. —If any doubt arises as to whether a concern is an industrial concern or not, the
same shall be referred to the 4
[Small Industries Bank] for its decision and the decision of the 4
[Small
Industries Bank] thereon shall be final.]
(d) “prescribed” means prescribed by rules or regulations made under this Act;
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[(da) the expression “public sector bank” means the State Bank of India constituted under the
State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India
(Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of
the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) or under
section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980
(40 of 1980);]
(e) “Reserve Bank” means the Reserve Bank of India constituted under the Reserve Bank of India
Act, 1934 (2 of 1934);
(f) “scheduled bank” means a bank for the time being included in the Second Schedule to the
Reserve Bank of India Act, 1934 (2 of 1934);
1. Subs. by Act 39 of 2000, s. 2, for clauses (x) to (xiii) (w.e.f. 5-9-2000).
2. Explanation renumbered as Explanation 1 by Act 43 of 1985, s. 2 (w.e.f. 21-8-1985).
3. Ins. by s. 2, ibid. (w.e.f. 21-8-1985).
4. Subs. by Act 39 of 2000, s. 2, for “Development Bank” (w.e.f. 5-9-2000).
5. Ins. by s. 2, ibid. (w.e.f. 5-9-2000).
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[(fa) “Small Industries Bank” means the Small Industries Development Bank of India established
under sub-section (1) of section 3 of the Small Industries Development Bank of India Act, 1989
(39 of 1989);]
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[
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[(fb)] “State Co-operative Bank” shall have the meaning assigned to it in Clause (f) of
section 2 of the Reserve Bank of India Act, 1934 (2 of 1934);]
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[(fc)] “State Government”, in relation to a Union territory, means the Administrator thereof;
(g) “underwriting” means contract, with or without conditions, to subscribe for stocks, shares,
bonds or debentures of an industrial concern with a view to the resale of the whole or any part
thereof.