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Journalism of Courage
The finance ministry is taking a fresh look at the future of the oldest financial institution in the country — IFCI. In the next couple of days, the top brass of IFCI and IDBI will meet to discuss the pros and cons of a merger between the two entities.
As the possibility of a merger gathers speed, it appears an earlier proposal — to merge IFCI with PNB — is being put in cold storage. According to FI sources, a decision on IFCI is expected by the end of this month or by the first week of the next.
When contacted, IDBI CMD M Damodaran said he was not aware of any such moves towards a merger between IFCI and IDBI.
Though both IFCI and PNB had appointed merchant bankers to do separate due diligence for the proposed merger — announced by the previous government — there’s little headway.
In fact, PNB had earlier stated that the IFCI-PNB merger would not be a smooth process given the differences in organisational structures.
In the recent Budget, the UPA government announced a package of Rs 226 crore for IFCI.
According to FI sources, this is part of the restructuring package that was earlier announced by the previous NDA government.
The FI would get some amounts in installments to meet their outstanding foreign liability for the year. So, Rs 226 crore is approximately the amount that would come up for repayment on the FI’s oustanding foreign liability in 2004-05, FI sources said.
