Assam Financial Corporation (AFC) Moribund: MD & Chairperson Seriously Out of Sync

STAFF REPORTER

GUWAHATI: The Assam Financial Corporation (AFC) is moribund. The immediate cause for such a plight of the Corporation is that the successive “managing directors, chairpersons and deputy commissioners have not been working as a team”. The AFC has been ailing since 1992.

Since its inception in 1954, AFC has been promoting entrepreneurship and growth of the MSME (Micro, Small, & Medium Entrepreneurs) sector. It has provided financial assistance to a total of 7,318 projects, both in service and manufacturing sectors involving a total loan of Rs 29,399.84 lakh, as on March 31, 2019. However, according to official sources, Rs 16,628.53 lakh of the total loan disbursed has been defaulted. To cap it all, as many as 672 units together defaulting Rs 9,987.73 lakh as loans have been declared NPAs (non-performing assets) – with the closure of 240 of them and 88 others declared irregular. The 153 regular units of them have not been repaying their loans. Cases have been filed under various sections of the State Financial Corporation Act, 1951 against 191 units defaulting loans, but to no avail. In all, AFC had 15 branches in the Northeast. However, one branch each at Shillong and Imphal had to be closed down recently.

What ails the Corporation? The Chairperson of the AFC does not have any executive power which rests with its Managing Director (MD), a post held by an IAS officer of the State government. Pinpointing the reason behind such a plight of the Corporation, sources say that it has always been seen that the successive MDs and Chairpersons have been working out of sync. “That apart, the MD seldom comes to the office of the Corporation at Paltan Bazar in Guwahati. He comes to the office once or twice a month. He feels cozy to run AFC from the State Secretariat. However, the Corporation, including its Chairperson, is toothless without any executive power when it comes to the recovery of loans from the NPAs. We do seek help from the Deputy Commissioner for seizure, confiscation or eviction of NPAs, but get no response,” an AFC source said, adding: “To cap it all, the MD, the Chairperson and the DC never sat together to device plans to recover the default loans. Adding to this, the MDs are frequently transferred. Hence, they too cannot concentrate. In the past one-and-half year, the Corporation has seen as many as four MDs.”

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