However, during the quarter ended December 31, 2000 the institution's gross profit (before depreciation and taxation) declined to Rs 225.8 crore, as against Rs 304.99 crore during the corresponding period of the previous year. The decline is attributed mainly to the higher provisioning for bad and doubtful debts and lower capital gains vis-a-vis the position during the corresponding quarter in the previous year. The nine month profit of the institution has fallen by around 18 per cent to Rs 543.2 crore from Rs 636.8 crore recorded during the corresponding period of the previus year. The institution has made provisions of Rs 12.0 crore for income tax during the third quarter, while the lower capital gains on sale of investments (Rs 76.9 crore as against Rs 199.8 crore during April-December 1999) was due to depressed state of capital market for a part of the current year.

Given the mixed signals emanating from various sectors of the economy, IDBI would focus on the crucial areas of NPA management and resource management. The time-bound programme adopted by the bank in NPA management lays emphasis on identifying the potential NPAs and formulating turn-around package by way of financial and business restructuring, said Mr GP Gupta, chairman & managing director, IDBI.

The operations of IDBI during April-December 2000 also showed marginal decline, in terms of both sanctions and disbursement of assistance. While assistance under non-project finance increased considerably, assistance under project finance declined mainly due to slow growth of asset formation in the real sector. During April-December 2000, direct assistance to infrastructure constituents accounted for over 35 per cent sanctions under direct finance. The disbursements of direct assistance to infrastructure projects increased by 39.5 per cent to Rs 19430 crore in April-December 2000. Major demand for funds in this segment came from the power and telecom sector. It is expected that this sector would continue as a major source of demand in the coming days, said Mr Gupta.

The sanctions under direct finance declined by 0.9 per cent from Rs 18,455 crore during April-December 1999 to Rs 182.84 billion and formed 94.7 per cent of overall sanctions during April-December 2000. The disbursements declined by 6.1 per cent to Rs 9474 crore during the same period. The sacntions and disbursements of the institution under project finance aggregated Rs 9099 crore and Rs 3764 crore respectively. Major demand for finance came from infrastructure sector.

Direct assistance to infrastructure constituents increased by 5.6 per cent to Rs 6548 crore from Rs 6200 crore during the corresponding period of the previous year. Disbursements of direct finance to infrastructure projects increased by 39.5 per cent to Rs 1943 crore in April-December 2000. The demand for non-project finance remained strong with sanctions and disbursements increasing by 21.8 per cent and 7 per cent respectively to Rs 91.86 billion and Rs 5710 crore respectively.

Industry-wise, the share of electricity generation (26.6 per cent) in the overall assistance sanctioned was the highest, followed by services other than telecom services (14.7 per cent), chemicals other than petrochemicals (9.5 per cent), petrochemicals (6.7 per cent) and telecom (6.3 per cent). These five industries together accounted for 63.7 per cent of total assistance approved during April-December 2000. These five industries also accounted for 48.2 per cent of the total disbursements during the period. Infrastructure constituents accounted for 35.8 per cent of total sanctions and 20.8 per cent of total disbursements during the first nine months of the year.

IDBI's total income during April-December 2000 was Rs 5932 crore as against Rs 5905 crore during April-December 1999. The income from operations during the period stood at Rs 5827 crore 1.9 per cent higher than the same during April-December 1999. Total expenditure increased to Rs 5166 crore from Rs 4937 crore during the same period. Interest expenses at Rs 4972 crore showed a higher increase of 4.8 per cent. Gross profit (after interest but before depreciation and tax) amounted to Rs 766 crore.

The total borrowings during April-December 2000 aggregated to Rs 6428 crore. Rupee borrowings of Rs 5893 crore comprised mainly CDs (Rs 1536 crore) and Omni bonds (Rs 3764 crore). The borrowings and drawals of foreign currency under various lines of credit amounted to Rs 536 crore. The cost of incremental rupee borrowings during April-December 2000 at 11.31 per cent was lower by 97 bps as compared to 12.28 per cent during April-December 1999. The average maturity of such borrowings during April-December 2000 was 3.28 years (5.25 years in April-December 1999).