The proposal of merging IDBI with IIBI has been almost finalised. But it will be only after the passage of IDBI repeal bill, informed sources said.
After the merger, the new entity will not only continue developmental financing but also carry out commercial banking operations including raising cheaper deposits.
The two FIs are currently facing the same problem their cost of borrowing is higher than cost of lending, while their non-performing assets are on the rise. While the combined assets of IDBI and IIBI was over Rs 70,000 crore, their NPAs were close to Rs 20,000 crore.