The Industrial Development Bank of India will start its retail banking operation with 100-odd branches from April this year, its chairman M Damodaran said in New Delhi on Tuesday.

"We are ready. We are waiting for the notification and the appointed date for starting banking operation. It will be any day in April," Damodaran told reporters.

• IDBI-IDBI Bank merger option open

As per the IDBI repeal bill, the financial institution will transform into a 'banking company' registered under the Companies Act.

The IDBI Act was repealed in the winter session of Parliament to pave way for a smooth transformation of the country's biggest FI into a bank.

Although the name of the FI would change to IDBI Ltd, Damodaran said the new bank will carry out, both, term and retail lending.

"IDBI will continue to carry out developmental finance. But we will also access low cost deposits and carry out retail lending as well. There will be two different units under the same bank," he said.

IDBI has started training about 450 of its staff for retail operations, he said, adding that senior banking personnel would also be inducted to fill the gaps.

"The skill sets are already there. As far as retail banking is concerned, we have started training our officials already," the IDBI chief said.

IDBI will start with 100 branches including the existing 29 branches of the FI. "We will also start ATMs and tie up with other banks for sharing their ATMs," he said.

Damodaran declined to divulge details of investment that would be required to start the banking operations, but said: "We are doing up the premises, renting new premises, inducting new technology and people."

Damodaran exuded confidence that IDBI will be in profits right from the beginning as it would have access to low cost funds and carry out retail lending.

"Henceforth, large companies will get all the facilities like term finance, project finance, retail finance and trade finance from IDBI. This facility is being offered by a handful of banks like SBI, right now," he said.

The transformation into a bank would also lower the cost of borrowing of IDBI drastically and improve its financial health.

At present, IDBI's gross non-performing assets are at 33 per cent, while net NPAs are at 10 per cent.