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Wednesday, February 11, 2015

Union Cabinet decides to Increasing the Authorised Share Capital of the NMDFC and restructuring of its Business Model

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, gave its approval for increasing the Authorised Share Capital of the National Minorities Development and Finance Corporation (NMDFC), a Central Sector Public Enterprise (CPSE) under Government of India in the Ministry of Minority Affairs from Rs. 1500 crore to Rs. 3000 crore. 

Approval was also given to revise the shareholding pattern from 65:26:9 to 73:26:1 among the Centre, States/Union Territories and Individuals/Institutions respectively. Further, approval was also given for restructuring of the NMFDC's business model. 

The decision will enlarge the quantum of funds available for economic activities, better coverage and enhanced outreach. Enhancement of share capital would expand its ambit of coverage and increase disbursement of funds to larger sections of the economically deprived minority population. The target of NMDFC for the year 2014-15 is to cover 97000 beneficiaries. 

NMDFC implements its schemes through 37 State Channelizing Agencies in 29 States/UTs, NMDFC will tie up with the Nodal Bank wherever required to enhance its outreach. 

Background 

NMDFC was constituted on 30th September 1994 as a non-profit making company under Section 25 of the Companies Act, 1956. The NMDFC provides loans at concessional interest rates for self-employment and economic development activities to backward sections of minority communities namely, Muslims, Christians, Sikhs, Buddhists and Parsis having family income upto Rs. 1,03,000/- in urban areas and Rs. 81,000/- in rural areas. "Jains" have also been notified as a minority community recently in 2014, and become eligible to be covered under the schemes of NMDFC. Central Government has exhausted its contribution of (65 percent) by paying share of Rs.975 crore. Hence it is essential that the Authorized Share Capital of the Corporation is enhanced so that the earmarked Central contribution could be released to NMDFC for implementing its schemes for the development of minorities at the lowest rungs of poverty pyramid. 
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