New Delhi, Jan. 27: The government today held a meeting with top officials of the Industrial Development Bank of India (IDBI) and the standing committee on finance on the modalities of the formation and functioning of IDBI as a commercial bank.
The meeting was attended by finance secretary S Narayan, banking secretary Vineeta Rai, IDBI chairman P. P. Vora and members of the standing committee on finance.
“The government has taken the initiative to plan and structure it in a way that will suit it,” sources said. “The government is of the view that it will be its own bank.”
Earlier, in November, the government had provided a Rs 2,500-crore package for IDBI and also introduced a Bill to repeal the IDBI Act which would help it enter the retail banking segment but subject to the Reserve Bank of India’s approval.
The current IDBI Act does not come under the Banking Regulation Act.
However, the Bill was referred to the standing committee on finance during the winter session last December when the Opposition demanded ‘a relook’ at the Bill.
The Bill makes special exemptions with regard to priority sector loans and parameters relating to cash reserve ratio (CRR) and statutory liquidity ratio (SLR) — two methods that the RBI uses to siphon off excess liquidity from the banking system.
Sources said: “The Bill will have a smooth sailing in the coming budget session as most of the Opposition members kept quiet during the meeting,” the official said, adding the only concern expressed was regard to ‘protection of the existing customers’.
“The officials promised they will be taken care of. We will have another meeting with industry body representatives before it is cleared by the standing committee,” the official said.