The Reserve Bank of India has accorded sanction to the Kerala Financial Corporation (KFC) to accept deposits from the public.
With the long-awaited permission, KFC has become the only State Financial Corporation in the country to raise deposits (Domestic/INR), in recent years.
There are strict norms for allowing financial institutions to raise deposits from the public and the permission has been given by the RBI based on their financial performance, compliance of norms and the level of Non-Performing Assets (NPAs).
KFC ,which had been reeling under high-level of NPAs till two years ago, could reduce the same to 1.3 per cent in the last financial year, thereby adhering to banking standards.
The Corporation also recorded its highest profit during the last financial year and distributed the highest dividend among any state-owned Public Sector Undertaking (PSU) .
The improved performance of the KFC had been achieved despite the fact that the rate of interest charged by it was among the lowest in the market.
The KFC has also come out with innovative schemes to finance film making and theatre renovation to encourage investment in areas where Kerala has conventionally been strong, the entertainment industry being one such area.
The KFC has also lived up to its corporate responsibility by offering soft loans on easy terms to energy saving projects, for installation of waste treatment plants, for installation of quality food testing laboratories, etc.
The Kerala Financial Corporation expects to register over `50 crore net profit in the current financial year.