IDBIs Conversion Into Bank May Be Deferred Till Oct

New Delhi, March 28 | Updated: Mar 29 2004, 05:30am hrs
The conversion of the countrys largest financial institution IDBI into a commercial bank is likely to be deferred by six months. We have asked the government to defer the appointed date (for conversion of the FI into a bank) to October 1, IDBI chairman M Damodaran told PTI .

The IDBI board had earlier taken this decision and the FI had approached the finance ministry for fixing the appointed date on October 1.

The appointed date for the conversion, April 1, is being deferred as IDBI needs more time to reorganise itself, official sources said.

Following passage of the IDBI Repeal Bill, the FI will have to register with the Registrar of Companies and clear all other legal formalities.

Regulatory forbearance was sought for IDBI during the first five years of its transition, within which the FI has to meet the RBIs stringent prudential norms on cash reserve ratio and statutory liquidity ratio. IDBI also sought RBIs permission to treat infrastructure lending as priority sector lending to meet its obligations.

The FI is also looking at various options, including merger with its private banking arm IDBI Bank and then with a large PSU bank.

PTI