LITERATURE REVIEW

Kerala State Industrial Development Corporation Ltd. (KSIDC Ltd.) is one of

the pioneer organizations in Kerala for Industrial promotion. The Govt. of Kerala has
accepted KSIDC as a nodal agency for Industrial promotion in Kerala. The amounts for
Industrial promotion are earmarked in the Annual Budgets.
KSIDC, as a facilitator and financier for industries, offers wide ranging
assistance in industrial promotion. The key areas of our focus include:
 Identification of Investment Ideas
• Translating ideas into concrete proposals
• Feasibility Study, Project Evaluation
• Financial Structuring, Loan Syndication
• Assisting in Central and State Govt. Clearances
• Development and Administration of Growth Centers
• Industrial and Infrastructure development
type

Through the study the following findings were made

 Urgent steps have taken from 2005 on wards by the Corporation to increase the
volume of business and reduce the NPA level:
 Corporation has doubled the volume of good business from2005. Most of the
sanction during the year relate to hospital projects, steel making units, takeover
loans and infrastructure project.
 Faster settlement of aged loans by liberal One Time Settlement Scheme.
 To improve the profitability of the corporation it has sold some of the lited shares
in the market and has improved the profitability. The profit is said to have
increased from 13.3 crores in 2009-2010 to more than 21 crores.
 Many mega projects like petrochemical complex, investment in Special Economic
Zones are being considered.
The following suggession were put forward

A humble effort has been made to provide a few suggestions to KSIDC in the following
ways.

1. The officers of the corporation can be given suitable training and exposure to
international markets so that the global implication of the market changes,
technical improvements can be ascertained and appraisal skills can be improved.

2. Conducting and launching of massive recovery campaigns at each quarters by

taking up-to date information and classifying standard, substandard and doubtful
assets with utmost care on loss assets.

3. A separate monitoring department can be set up to focus on recovery. It is

understood the corporation had a separate monitoring department in the past.

4. Introduction of client profile reports should be made to have proper monitoring

system. This allows The Recovery Officer to know more on the performance of
the industry. A close and prompt watching system helps to prevent accounts
becoming irregular

5. Additional securities should be obtained to strengthen the loan asset and reduce
the provision requirements.

6. Lack of proper follow up or credit supervision is one of the main contributory

factors for the incidence of NPA. The main officials should visit personally the
promoters’ premises, not only for recovery of loans, but also for guiding /
counseling the borrower for smooth operation of business.

7. To bring down the level of NPA it is absolutely necessary to initiate timely and
appropriate legal action for reduction of dues from borrowers.

8. The Corporation should adopt an “early alert system” so that it can easily
understand the industries, which are going to be sick and can do the needful to
prevent the project from falling into the category of sick units.
9. Units which can be revived by rehabilitation should be taken up as a priority step
to upgrade the NPA level.