IDBI to consider loan reschedulements

CALCUTTA, MAY 4: IDBI, one of the premier development financial institutions DFI, in the country would fund voluntary retirement scheme...

CALCUTTA, MAY 4: IDBI, one of the premier development financial institutions DFI, in the country would fund voluntary retirement schemes for manpower rationalisation of companies. It would also consider reschedulement of loans as demanded by the industry.

Announcing this here today, IDBI chairman G P Gupta, said that the funding would be made only if this was a part of an overall restructuring of a company and not for VRS per se. To help companies tide over the industrial recession, the IDBI chairman said that the financial institution would look into the aspect of rescheduling of loans, a demand which had been put forward by a large number of corporates.

However, he said that rescheduling of loans would be done only for companies which had been a victim of the recession and not for companies due to financial mismanagement. On providing finance to the services sector, Gupta said that IDBI was also willing to do so only after estimating the cash flows of such companies.

While criticising the delayed implementation of projects leading to time and cost overruns, he said that few unscrupulous promoters who came to the market with public issues were primarily responsible for the erosion of investors8217; confidence in the capital markets.

The IDBI chairman also said that this had been the sole reason as to why corporates were finding it difficult to tap resources from the equity route. In this context, he said that a working group comprising of representatives of various financial institutions would be set up shortly to study corporate governance in private sector as perceived by the financial institutions.

Gupta said that another working group would be formed to look into the issue of corporate governance as practiced by the financial institutions themselves.

On the disbursements made by all-India financial institutions during 1998-99, he said that it was higher by 29 per cent than 1997-98. The actual disbursements was of the order of Rs 55,000 crore against Rs 51000 crore in 1997-98.

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On IDBI8217;s sanctions and disbursement during 1998-99, he said that the figures were Rs 25,542 crore up 6.5 per cent and Rs 14357 crore down five per cent respectively.

According to him, the industries which suffered most in 1998-99 were steel, automobile and textiles. He said that FDI and FII flows into the country had also fallen in 1998-99. However, he added the industrial growth was lately picking up as data for February 1999 suggested.

IDBI, ICICI panel on corp governance

CALCUTTA: In a bid to meet the long-pending demands of the financial sector, IDBI and ICICI have decided to form two separate working groups under their leadership to introduce corporate governance in financial institutions and the corporate sector, IDBI chairman G P Gupta announced here today.

Claiming this to be the first such step towards stabilising the industrial scenario in the country, Gupta said that the present low industrial growth had created a number of peculiar problems for both public and private sector industries as well as financial institutions and other intermediaries, and this necessitated immediate introduction of some code of ethics like corporate governance for all.

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Gupta stated that though the decision for the establishment of two separate working groups for corporate governance under IDBI and the ICICI had already been taken in a joint meeting with the country8217;s financial institutions, no date had yet been fixed for their formal launching. He, however, assured the members that the groups would be set up very soon. We are also working on the formation of the groups in close cooperation with the financial sector, Gupta said.