Bad debts pull IDBI net down by 25

The IDBI chairman said that the bank is in talks with many foreign insurance companies for a possible foray into the life insurance sector in association with a third partner. 8220;We are open to all the options. We can also offer a stake to a third partner for insurance joint venture,8221; Gupta said.

Gupta also ruled out any further assistance to defaulting industrial groups, particularly in steel and textiles sectors, which contributed about 23.5 per cent of the total NPA of IDBI. The economic reform process has turned several small and medium scale manufacturing units sick and there are virtually no scope for them to get recovered mainly due to the opening up of Indian economy.

Gupta said that IDBI funded about 900 small units with a capital base of less than Rs 10 crore. These units became sick in the recent years which blocked about Rs 800 crore of IDBI finances as NPAs. In 1999-2000, IDBI recovered about Rs 282 crore as one-time settlement from these units and the remaining Rs 600 crore is in the process of recovery through negotiations.