Rai put in his papers without citing any reasons after the government asked him to, say sources. The IFCI board did not intervene in the decision.
* BSE Sensex
* NSE Nifty
* Top Gainers/Top Losers
* Top Value
* Top Quantity
"He has resigned on his own, citing personal reasons. In the resignation letter, he did not give any other details," a top finance ministry official told FE. "A panel will soon be set up to find a replacement," the official added. Rai could not be reached for comment despite repeated attempts.
Rai's fate was perhaps sealed after the government converted R923 crore worth of optionally convertible debentures into equity last year,a move that Rai had opposed. The conversion made the government the majority stakeholder in the country's oldest financial institution based in Delhi with a 55.57% stake.
The government has been periodically bailing out IFCI since 2001. IFCI saw an improvement in its financial health for a few years. However, deteriorating environment hurt the company's bsuiness; IFCI's net profit fell to R532 crore in 2012-13 from R715.76 crore in the previous fiscal and net non-performing assets surged to 10.2% of advances during the last fiscal from 1.9% in 2011-12.
Employee organisations have raised some concerns relating to the manner in which the organisation was being run.