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"Among the new areas that would receive attention are loan asset securitisation, trading in Government guaranteed papers and IPO financing," Dr Samal said.

KOLKATA, Aug. 15

DR B. Samal, CMD of Allahabad Bank, who took over the additional charge of acting CMD of Industrial Investment Bank of India (IIBI) on Monday, held a meeting with the senior executives of IIBI here today (Thursday) and took a stock of the situation.

Later, while talking to Business Line, Dr Samal identified the reduction of the non-performing assets (NPAs) as the thrust area. The net NPAs as on March 31, 2002, amounted to Rs 614 crore, he said.

Among the new areas which, he said, would receive attention are loan asset securitisation, trading in Government guaranteed papers and IPO financing.

Integrated management of resource raising, liquidity management, upgradation of technology and the reduction in administrative costs would also be given priority, he said adding that the corporate management committee comprising all the chief general managers would monitor the day to day operation of the institution.

Referring to several good things about IIBI, Dr Samal said that till date the organisation had not defaulted in servicing its liabilities. In 2001-02, Rs 777 crore had been serviced through retirement of Rs 268 crore of high cost debts executed through call options.

The cost of fund too had been reduced to 12.04 per cent in 2001-02 from 12.45 per cent 2000-01. In past three years there had been increased provisioning - Rs 61 crore in 1999-2000, Rs 95 crore in 2000-01 and Rs 173 crore in 2001-02. The five-year tax holiday granted by the Central Government ended in 2001-02, he added.

IIBI was formed in March 1997 by converting Industrial Reconstruction Bank of India, which was formed in 1985 again by converting Industrial Reconstruction Corporation of India, which was set up in 1971. Since in its initial phase, the institution was engaged only in financing the sick units, its portfolio consisted of a large number of NPAs.

While the reduction of NPAs could be achieved either by the out of court settlement or through legal action, IIBI has to proceed in this matter carefully in view of the consortium lending in many cases.

Other partners in the consortium had to be involved in the recovery drive, particularly in the present economic situation, he added.

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