``This is despite the power sector being a risky venture, the corporation has posted nearly zero outstandings '', sources in PFC told UNI.

Also, the PFC has no NPAs, compared to IDBI, IFCI and ICICI who have an average of 8 to 12 per cent NPAs.

The profit after tax of PFC is Rs 545 crore which is Rs 2.2 crore per employee. ICICI has Rs 0.9 crore per employee, IDBI 0.5, and ICICI Rs 0.4 crore. PFC's return on net worth in 1998-99 stands at Rs 22 crore as compared to IDBI's Rs 19 crore, ICICI's Rs 20 crore and IFCI's Rs 23 crore. One of the reasons for a high recovery rate is because all loans are guaranteed by state governments. ``Our system is cash accounting one, we don't charge interest into the loan account immediately and only when it is received it is booked into income account'', a PFC official said.

Moreover, PFC has beenengaged in constant and intensive follow up with the borrowers at various levels.

Emphasising on escrow mechanism for repayment of dues on due dates.Incentive for timely payment of dues by way of offering 0.5 per cent reduction in applicable interest rate. Reduction in penal interest being charged if paid within stipulated times.

Sources say that PFC has gone in for stringent remedial action in case of default -- such as suspension of disbursement and sanctions to the borrower if the default persists for more than 90 days.

Borrowers are being given reduction of four per cent in the applicable interest rates (additional one per cent for north-east states and states which have established regulatory commissions on the repayment of loans identified under accelerated generation and supply programme initiated by PFC to provide low cost funds to the power sector and approved by the government.

Meanwhile Crisil has assigned the highest safety rating AAA to PFC's proposed bond issue of Rs 600 crore. Therating reflects PFC's favourable financial position arising out of a high degree of capitalisation, low cost of capital and comfortable spreads, sources said.

Also PFC's 7.5 per cent bonds maturing in July 2009 have appreciated by 100 basis points to 425 points recently over us treasury from 525 basis points in April 26. PFC has appointed ABN Amro as the lead arranger for its $100 million ECB issue.