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Journalism of Courage
NEW DELHI, Jan 4:The finance ministry today cautioned financial institutions against lending to subsidiaries of multinationals which park money in unviable non banking financial companies thereby jeopardising national interest.
Official sources told newsmen one such company which has already borrowed around Rs 3000 crore from Indian financial institutions has sought another Rs 300 crore from these institutions for deploying it possibly in NBFCs.“We have cautioned financial institutions against such moves,” sources said after financial institutions (FI’s) chiefs met finance minister Yashwant Sinha and other senior officials. Sources said another multinational company was also resorting to such methods and the FI’s were told to be careful.
Meanwhile a finance ministry spokesman described today’s meeting as “routine” and said disinvestment process or buyback of public sector undertakings did not figure in the discussion.The meeting discussed only the general state of the economy.
However sourcessaid there would be a meeting with FI’s to discuss disinvestment process shortly.
CEO’s of Industrial Development Bank of India, Unit Trust of India, Industrial Credit and Investment Corporation of India and Industrial Finance Corporation of India were among those who met the finance minister.ICICI managing director, K.V. Kamath said his institution was not averse to disinvestment if the prices were reasonable.
He said government would have to start the process within the next four to eight weeks if the money was to be realised in this financial year.The government had also issued a four point directive to all financial institutions on the approach to be adopted in companies in which they enjoy significant stake.
