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Govt plans to split IDBI in two
BS Economy Bureau in New Delhi |
October 02, 2003 08:27 IST
The government is likely to split Industrial Development Bank of India in two, on the lines of IFCI Ltd.
The bad assets of the institution will be transferred to an asset reconstruction company for recovery. The good assets will be retained in IDBI's new avatar as a bank.
IDBI's gross non-performing assets stood at Rs 16,006 crore (Rs 160.06 billion) for the year-ended March 31, 2003. The net NPAs were Rs 7,308 crore (Rs 73.08 billion). Its total asset base was Rs 63,115 crore (Rs 631.15 billion).
Banking and insurance secretary N S Sisodia told newspersons on Wednesday that the government's decision was to convert IDBI into a bank and allow it access to deposits.
"IDBI will, however, focus on providing credit to the manufacturing sector and enter more vigorously the areas of infrastructure financing," he said.
The report card |
(In Rs crore) |
| 2002-03 | 2001-02 |
Income | 6371 | 7175 |
PAT | 401 | 424 |
(In Rs) |
Gr NPA | 16,006 | 14,449 |
Net NPA | 7,308 | 6,500 |
Aggregated provisioning | 8,677 | 7,949 |
Sisodia said, in the case of IFCI, the bad assets were transferred to an asset reconstruction company floated by the institution itself.
While he said IDBI might follow the same route, it was not clear if the institution would also float its own asset reconstruction company to transfer the bad assets or move them to one of the three existing ARCs.
The secretary made it clear that IDBI would retain its character of a development financial institution after its conversion into a bank.
He also said the ministry had not taken any decision on a merger proposal of the Kolkata-headquartered Industrial Investment Bank of India with IDBI.
According to him, whether IDBI, post conversion, would be allowed to function like a retail bank would be decided in consultation with the new management.
Following PP Vora's retirement, the government last week handed over interim charge of IDBI to additional secretary M Damodaran, who is the administrator of UTI Specified Undertaking and also heads UTI Mutual Fund.
Sisodia also said a reverse merger of IDBI with IDBI Bank was not being considered seriously at this stage.
Though there were opposite views on the issue, IDBI would be converted into a bank without any reverse merger, he said.