The Hindu Business Line : IDBI transfers Rs 1,000 cr standard assets

"We decided to transfer those assets because we realised that they were stressed, even though they had not yet been classified as non-performing," Mr M. Damodaran, Chairman of IDBI, told newspersons here. The Government had made a Budget provision of Rs 9,000 crore to create the SASF.

Consequently, IDBI's net non-performing assets (NPAs) did not go down to the expected sub-one per cent level but stopped at 2.4 per cent. "Had we transferred NPAs alone, our net NPAs would have been 0.82 per cent. However, as a prudent measure, we decided to transfer some standard assets that may become bad and retain some NPAs. We hope to recover a large part of the NPAs that we have retained," Mr Damodaran said.

The Dabhol Power Company, with an amount of Rs 1,213 crore, tops the list of assets transferred to the SASF. The other large assets transferred to the fund included those of Malavika Steel with Rs 595 crore, Mid-East International with Rs 462 crore, Bellary Steel with Rs 399 crore and Pashupati Spinning with Rs 150 crore.

IDBI's NPA coverage ratio is currently 85 per cent. It has gross NPAs of Rs 5,573 crore or 13.86 per cent of assets, but net of provisions, the number stands at Rs 881 crore. It has made an ad hoc provision of Rs 1,400 crore to cover any assets that may become stressed during the year.

During 2003-04, IDBI transferred 18 bad assets with a principal worth Rs 382 crore to Asset Reconstruction Company (India) Ltd for Rs 246 crore.

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