Sources said the management had prepared an action plan for in readiness for its corporatisation. The Cabinet has already okayed its restructuring and a Bill to this effect was being readied for tabling in Parliament. The plan included all aspects of the required change in structure and practices. These include building up of finances in tune with the upcoming norms for cash reserve ratio and statutory liquidity ratio, once the FI converts itself into a universal bank. It is understood that based on a five-year estimation of liabilities that could accrue, IDBI has drawn up the funds required for concomitant provisions.
There will also be the legal aspects of restructuring, as also the sequencing of the human resource repositioning and redeployment, including a VRS option, infrastructure build-up like more branches and a state-of-the-art technology platform.
Officials insisted this would be a routine performance review, but it is understood that the board might discuss concessions/waivers for sticky steel sector lending, where the FI had an exposure of marginally over 15 per cent. This was in excess of the limit set for assistance to any single industry.
Its total exposure to top five industries - steel, fertiliser, cotton textiles, paper and power - accounted for over 46 per cent of its total outstanding during 2001-02.
Over the past five years, the FIs total non-performing assets rose to Rs 10,466 crore, up 17 per cent during the last fiscal. Net NPAs rose to Rs 8,371 crore in March last year but fell 11.69 per cent during 2001-02.
IDBI has seen a decline in its networth from Rs 9,127 crore at end-March 2001 to Rs 6,654 crore in March 2002. With selective lending and exercise of call option on its high-cost borrowing last fiscal, it had also reduced its total assets and liabilities from Rs 71,783 crore to Rs 66,643 crore.
The creditor institutions on Tuesday agreed to roll over its debts. Its profit after tax during 2001-02 dipped to Rs 424 crore against Rs 691 crore the previous fiscal, according to the management.