• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• The Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Sarbajeet K. Sen

New Delhi , Oct. 23

A frail IFCI Ltd appears to be gathering enough strength to drag along another limping institutional warhorse - the Industrial Investment Bank of India (IIBI).

The Ministry of Finance has decided to tie the fate of IIBI with that of IFCI. Thus, instead of following an independent path, IIBI would have to adopt the same route that is eventually decided for the future of IFCI.

"IIBI and IFCI would go together. Whatever plan of action we decide for IFCI, IIBI would have to go along with it," senior finance ministry officials said.

Both term-lending institutions had hit a prolonged rough patch with their exposure to industry turning sour.

With stand-alone turnaround ruled out for both the entities, the Government has been forced to look out for suitable merger plans with stronger institutions.

Tying up IIBI with IFCI signals a shift from the earlier plans chalked out by the Government for the Kolkata-based institution.

The Ministry had at one point virtually made up its mind to merge IIBI with IDBI Ltd irrespective of what awaited IFCI.

The present move to link the two institutions' plans assumes significance with the Finance Ministry exploring a new option for IFCI in addition to the earlier proposals of merger with either IDBI Ltd or Punjab National Bank.

It is understood that the public sector life insurance giant, Life Insurance Corporation, is also now being considered as a possible option with which IFCI could be merged.

It is being felt that IFCI with its expert appraisal skills gathered over the years through linkages with the corporate sector for term financing could be a useful outfit for conducting the appraisals for LIC's long-term exposure, especially to the infrastructure sector.

Tying the fate of the two institutions would also mean that the Ministry was not looking at a possible winding up of IIBI as has been conjectured among certain quarters.

IIBI, which was earlier known as the Industrial Reconstruction Bank of India, was set up to nurse weak corporates but in the process itself landed in a soup with most of its exposure turning bad over the years.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Andhra Bank in pact with NCMSL for loans against farm produce

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line