The year 2008-09 was very different financially. Towards the second half of the year, the interest rates shot up and people became really cautious while lending. The overall scenario in terms of financial sentiments worldwide had taken a severe beating and the flow of money was really thin.

Even in such a wary environment, the Rural Electrification Corporation (REC) did not let economic slowdown come in the way of its functioning or the projects of its borrowers. It was in recognition of the measures taken by the REC to ensure uninterrupted flow of work, that it was awarded the SCOPE Meritorious Award 2008-09 in the category of Best Managed Bank, Financial Institution or Insurance Company.

Incorporated in the year 1969 under the Companies Act , the REC commenced operations for financing rural electrification in India and developed its command in line with the government‘s developmental priorities and today ranks second in the country (after PFC) in terms of financing for power generation and the biggest in terms of transmission and distribution.

Since its inception in 1969, the REC has, till March 31, 2009 achieved loan sanctions totalling Rs.2.21 lakh crores while actual disbursements aggregate to over Rs.1 lakh crore.

REC Chairman and Managing Director P. Uma Shankar enumerates some of the steps the company took to ensure smooth financing of projects during 2008-09.

• The REC primarily ensured that funds required for lending were being mobilized.
• Ensured that projects went undisturbed.
• Borrowed for a short period so that interest rates did not weigh down upon the company.
• Made sure that repayments came in time.
• Made certain that borrowers were proper.
• Ensured proper implementation.
• Was very particular that money reached proper hands.

All these measures started to reflect in the company’s performance as the organisation’s non-performing assets (NPAs) also declined from Rs.360 crore to Rs.60 crore.

In 2005, the REC was also appo-inted as the nodal agency for overseeing implementation of the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY), a programme aimed at providing access to electricity to BPL families free of charge.

As on February 28, 2010, the REC has enabled the electrification of 75,068 villages cumulatively and has provided free electricity connections to 96,80,000 BPL households.

The REC’s loan portfolio grew by a staggering Rs.32,348 crores from Rs.18,305 crores in 2004 to Rs.50,653 crores in 2009. The dividend cheque paid to the government for the year 2008-09 was for Rs.386.4 crores

REC’s outlook remains positive about the future. For the year 2009-10, the REC has sanctioned projects worth Rs.45,000 crores, out of which, actual disbursements till March, 2010 aggregated Rs.21,000 crores.

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