| Adsul: United we stand
New Delhi, April 4: The government is considering a proposal to merge New Delhi-based IFCI Ltd with Industrial Investment Bank of India.
The Calcutta-based Industrial Investment Bank of India (IIBI) was set up in 1997 out of the former Industrial Reconstruction Bank of lndia and currently provides short and long term debts to a host of companies.
This is one of the options we are exploring, minister of state for finance Anand Rao Adsul told newspersons here. The standing committee of finance is studying the proposal.
The merger process is on as IFCI Ltd had accumulated losses of Rs 884 crore and non-performing assets (NPAs) of Rs 3,897.6 crore. For the nine-month period ending December 31, 2002, the institution reported a higher loss of Rs 609 crore as against Rs 489 crore in the previous year.
Adsul said the government would speed-up the restructuring process at IFCI in the post-budget session of Parliament. Hectic activity should be seen then. We have to find some way out to improve things.
He also said that the Bill to repeal Industrial Development Bank of India (IDBI) Act would be passed in this session of Parliament which would allow it to enter retail banking segment. The current IDBI Act does not come under the Banking Regulation Act.
Last November, the government had provided a Rs 2,500 crore package for IDBI and also introduced the Bill to repeal the IDBI Act.
But the Bill was referred to the standing committee on finance during the winter session held in December, 2002 when the Opposition demanded for a relook at the Bill. The standing committee of finance has given its approval, Adsul said.
Members of the standing committee on finance said the modalities of IDBIs transformation into a bank has been detailed in the committees report.
The government is of the view that it will be its own bank, said a member. Accordingly it had taken the initiative to plan and structure it in a way which will suit it, he said.
We had also ensured the protection of the existing customers, he added.
The Bill makes special exemption with regard to priority sector loans, cash reserve ratio and statutory liquidity ratio parameters, which a scheduled commercial bank firmly follows as per the RBIs guidelines. IDBI officials said the methodology of corporatisation would be finalised in consultation with the apex bank.