The Hindu Business Line : Damodaran stays favourite for full-time CMD of IDBI

THE Chairman of Unit Trust of India (UTI), Mr M. Damodaran, continues to be the Government's favourite to be ultimately appointed the full-time Chairman and Managing Director of the Industrial Development Bank of India (IDBI).

Mr Damodaran, who had been holding dual charge as acting CMD of IDBI since October 1, 2003 along with the UTI post, has recently been asked by the Government to continue holding the additional charge at IDBI till May 31, 2004.

What has fuelled an intense debate on the Government's future move on appointment of a full-time IDBI chief is the fact that he has also been asked to continue at UTI for another period of one year during which time he would be expected to complete some of the unfinished restructuring agenda at the mutual fund. Mr Damodaran's tenure at UTI was due to end in February.

"He (Mr Damodaran) would, in all probability, continue to be there (at IDBI) even after May. The extension at UTI is for only one year," a top Finance Ministry official said thereby hinting that present arrangement of the UTI chief holding dual charge might continue for some time beyond May 31.

There has been a huge interest, especially in the corporate sector, in the Government's moves on appointment of a full-time CMD for IDBI mainly due to the fact that the erstwhile development financial institution has been in the midst of a major restructuring exercise. As the country's largest DFI, IDBI had, over several decades, been providing term finance to support the financial requirements of industry.

The recast move, the groundwork for which has been laid by the passage of the relevant Bills in Parliament, has resulted in the institution being converted into a commercial bank that would continue to cater to the term-lending needs of the corporate sector.

While presenting the interim Budget recently, the Finance Minister, Mr Jaswant Singh, had said that IDBI in its new avatar would be moulded to become the lead institution with a focus on infrastructure funding. Along with this, as a bank, IDBI would be able to access cheap funds through deposits, a luxury it did not enjoy as a DFI.

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