The Rs 9,000 crore Stressed Asset Stabilisation Fund (SASF), the special purpose vehicle (SPV), constituted to take over the non-performing assets of the Industrial Development Bank of India (IDBI), has got ‘‘deemed financial institution’’ status from the government. This would enable the SPV to be a part of the Debt Recovery Tribunal (DRT) mechanism, which would be key to the recovery of assets by it. Confirming the development, Meleveetil Damodaran, chairman and managing director, IDBI, said: ‘‘The necessary notification on this has been issued. This will enable SASF to be party to the DRT process’’. IDBI is two days away from transforming into a banking company, and will, from October 1, be called the Industrial Development Bank of India Ltd. The notification making October 1 the appointed date for this conversion was also announced on Wednesday. ‘‘The deemed FI status is an enabling mechanism which allows the SASF the means to press a claim at the DRT. You have to be designated as an FI in order to be able to press a claim,’’ Damodaran explained. He said the SASF will also be a part of the corporate debt restructuring (CDR) process wherever assets transferred to it need to be restructured. The Budget created the SASF as a means of allowing IDBI to make the transition to a bank on a clean slate. The SASF will be a cash-neutral mechanism since it will issue non-interest bearing special securities for the purpose. Damodaran said the trustees of the SASF had met on September 27 and passed the first necessary resolutions to kickstart the process of the fund. He said despite the setting up of the SASF, IDBI was not transferring all stressed assets to the SPV. Others which have not been transferred to SASF are those where IDBI is hopeful that they would recover after a while. Special securities for SASF NEW DELHI: The government has issued special securities for an amount of Rs 9000 crore to set up the Stressed Assets Stabilisation Fund, (SASF), which will address the problem of the stressed assets of IDBI. The amount of Rs 9000 crore will be invested in non-interest bearing special securities of 20 year maturity with call option, as per an official release. The transaction is budget neutral for the government. The amount realised by SASF on the recovery of dues will be paid to the government annually.
