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Mumbai , Sept. 28

THE Finance Ministry will seek the expert advice on the final role of Industrial Development Bank of India Ltd, a senior Government official said.

``IDBI is certainly on the model of a universal bank but whether it should be a classical retail bank or whether it should concentrate on only corporates is yet to be finalised. We will seek some advice on this matter and also do some studies on the same,'' said Mr N.S. Sisodia, Secretary, Banking and Insurance, Ministry of Finance and Company Affairs. He was speaking to newspersons on the sidelines of the conference on ``Indian Banking: Global Benchmarks `03'', organised by the Federation of Indian Chambers of Commerce and Industry here. IDBI will have access to cheaper funds by way of retail deposits but there is some lack on clarity on whether it will do retail lending per se.

Asked whether there would be any merger with other financial institutions such as IFCI or IIBI, he said, ``It would be a little premature to comment on a merger and to say what entities are being considered for it.'' He neither confirmed nor ruled out the possibility of a reverse merger with its subsidiary, IDBI Bank.

Asked about the report being prepared on LIC on by Deloitte, said Mr Sisodia, ``The final recommendations of the Deloitte report are still awaited, once that comes a view will be taken. The Finance Minister has got the study done to know how LIC can cope with the emerging challenges of the changed environment of diversification of products and need for greater customer service.'' Addressing a gathering of bankers at the three-day seminar, Mr Sisodia raised the question of how the banking system should tackle the case of market failure. To elucidate the same he narrated a parable, ``A banker is one who lends you an umbrella when it's sunny and takes it away from you when it rains.''

He urged banks to use technology not only for the benefit of the city-based customer but also to reduce the transaction cost for the customer located in remote areas. Perhaps mobile phones can be handed out in panchayats to co-ordinate micro-financing efforts, he suggested.

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