Financial Daily from THE HINDU group of publications
Wednesday, Jan 21, 2004
Financial Daily from THE HINDU group of publications Wednesday, Jan 21, 2004 |
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Financial Institutions Money & Banking - Financial Institutions IDBI gearing to turn retail commercial bank — Plans to set up 100 branches Poornima Mohandas
Mumbai , Jan. 20 INDUSTRIAL Development Bank of India (IDBI) is to soon roll out 100 branches in its efforts to convert itself into a retail commercial bank. The plan follows the Finance Minister's recent announcement in the `mini Budget' that the institution's conversion into a commercial bank would be complete by April 1, 2004. The branches would be spread across 70 cities; the locations have been finalised based on statistics indicating which cities bring in maximum deposits, IDBI sources said. While New Delhi and Mumbai will have about seven to eight branches, Chennai is to have four, Pune, Kolhapur, Nasik and many other district headquarters figure in the list. A team of 50 officers from IDBI is to head out towards different parts of the country shortly to finalise the spaces to be taken on rent. IDBI is also planning to tie up with Stock Holding Corporation of India Ltd (SHCIL), in which it holds a stake, to utilise some of its offices as branches. Meanwhile, preparations are gathering steam, the provider of the technology backbone for the networking of branches is soon to be finalised, advertising/PR agencies are vying with each other for the institution's pitch and consultants are making presentations for finalisation of the new bank's work module. At present, the institution has 38 branches, mostly in State capitals, many of which will have to be relocated to spaces on the ground floor from the fifth and fifteenth floors they currently occupy, since these spaces prove unviable for retail banking purposes, said sources. A former chief general manager from the Reserve Bank of India, Mr M.R. Srinivasan, with a team of officers, are advising the development financial institution on the regulatory aspects of conversion into a commercial bank. Both houses of Parliament recently passed the Industrial Development Bank (Transfer of Undertaking & Repeal) Bill, 2002 facilitating the corporatisation of IDBI. Batches of officers with some previous banking background or experience are undergoing training in State Bank of India's institute in Hyderabad. Meanwhile, all seems quiet on the merger front with the institution still keeping all its options open and the Finance Minister not making any clear statements. The options of IDBI merging with its subsidiary, IDBI Bank, dilution of stake in it subsidiary or even merger with some public sector bank, as in the case of IFCI, are still being talked about.
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