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Govt
to repeal IDBI Act; reform package for IFCI in the offing
Our Banking
Bureau
23 October 2002
 New
Delhi: The central government says Industrial Development
Bank of India (IDBI) will be first corporatised by repealing
the IDBI Act in the winter session of the parliament as
part of its restructuring, while a reform package for
the ailing Industrial Finance Corporation of India (IFCI)
will be worked out by March 2003.
“The first
step will be corporatisation of IDBI through the repeal
of the IDBI Act. The idea is, once the IDBI Act is repealed
and it becomes a corporate entity, then we can look at
the future,” says Shekhar Agarwal, joint secretary
in the ministry of finance, after a meeting of lenders
and stakeholders here.
Agarwal says the
plans to merge IDBI with a public sector bank or converting
the financial institution (FI) into a universal bank will
be taken up only after the corporatisation. “We are
trying to repeal the IDBI Act by the winter session. There
is no proposal to bring in an ordinance as of now.”
Agarwal rules out a bailout plan for IDBI saying the financial
health of the FI is not bad enough to warrant it.
In the first ever
meeting of stakeholders and lenders, top officials of
finance ministry, the Reserve Bank of India, Life Insurance
Corporation, State Bank of India, Punjab National Bank,
Bank of Baroda and General Insurance Corporation also
discussed the restructuring plan of IFCI.
 Expressing
the government’s concern over IFCI, Agarwal says:
“We wanted to talk to lenders and stakeholders and
get their perception. We will take everybody’s views
and work for a proposal for IFCI. May be everybody has
to contribute something.”
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