To promote professional corporate governance in Public Sector Undertakings (PSUs) of Jammu and Kashmir, Minister for Finance, Dr Haseeb A Drabu, on Saturday asked them to move away from the government as much as possible.“The PSUs like the State Financial Corporation (SFC) should do serious human resource planning to ably respond to the changing dynamics of the financial markets,” the Finance Minister said while speaking at the 56th Annual General Meeting (AGM) of the SFC here today.The Finance Minister said the time has come to set the Public Sector Undertaking free of government intervention which was known to prove adverse for the health of such institutions. He said that post-liberalization, the condition of SFCs across the country had been hit as they failed to acclimatize with the changing fiscal environment."The changes taking place in the global economy demand that the PSUs should be run under corporate governance structure so that they compete successfully and avoid excessive dependence on government recapitalization," Dr Drabu said.
He asked the SFC to have some non-executive chairman from the sector and get some good directors from the financial sector to revive the Corporation. “Review the regulatory and legal environment you are working in. Take benefit from new legislations which are happening, invest in technology and leverage it to lessen physical presence,” he said.Dr Drabu said the main objective of SFC is to encourage and boost the Small Scale Industry in the State by providing finances and it must make best efforts to achieve the objective. He called for moving to a non-interest based model which would essentially mean Asset Management of impaired assets of other banks, lease financing and distribution of third party products. "You can also start giving out finances in the field of housing and private transport for government employees. The idea should be to prepare a customer for becoming viable borrower and institution which makes target decisions," Dr Drabu said.
The meeting suggested that the JKSFC should diversify its investments by venturing into different sectors like transport, tourism and education, etc. They also suggested adoption of industrial estates in Kargil, Kupwara and Rajouri for cluster funding to improve the financial health of the Corporation.The Minister also directed the JKSFC management to streamline and rationalize its business network and resources across the state and concentrate upon reducing expenditures and creating fresh opportunities of investment to ensure increased returns so that the Corporation can be set on profitable lines.The meeting also discussed the Corporation’s Balance Sheet and Profit and Loss Account for the year ending 31st March 2016 and Auditors Report and Report of the Board of the Directors on the working of the Corporation for the Financial Year 2015-16 and adopted the same.Earlier, the Managing Director J&K SFC, Mr. Mohammad Farooq Thoker gave resume of the functioning and achievements of the organization. He informed that during the financial year 2015-16 the Corporation realized the recovery of over Rs. 20 crore and disbursed Rs. 8.86 crore as loans to various institutions. The institution has earned a net profit of Rs. 46 lakh and registered a net worth of Rs. 33.35 crore as against Rs. 26.52 crore as against the corresponding period. He further informed that the Corporation has taken several reformative measures to streamline the functioning to make it more result oriented.The meeting was also attended by Principal Secretary, Finance, Navin Kumar Choudhary and JKSFC Managing Director, Mohammad Farooq Thoker besides other board members.