<h2The State Financial Corporation Act,1951
Section 7. Additional capital of the Financial Corporation
(1) The Financial Corporation may, in consultation with the Reserve Bank, issue and sell bonds and debentures carrying interest for the purpose of increasing its working capital
Provided that the total amount of the bonds and debentures issued and outstanding and of the contingent liabilities of the financial Corporation in the form of guarantees given by it or underwriting agreements entered into by it shall not at any time exceed five time the amount of the paid-up share capital and the reserve fund of the Financial Corporation.
(2) Bonds and debentures of the Financial Corporation shall be guaranteed by the State Government as to the repayment of the principal and the payment of interest at such rate as the State Government may, on the recommendation of the Board and with the approval of the Central Government, fix at the time of bonds and debentures are issued.
