The central government has set in motion the process of closure of Kolkata-based Industrial Investment Bank of India (IIBI) by handing out letters for the transfer of its employees to other banks. | |
| "Till today, 100 employees on payroll have been issued letters to move to other institutions to take up responsibilities there, but as there are 78 employees remaining, IIBI is still not closed," said a top source close to the development. |
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| The Reserve Bank of India (RBI) had notified the closure of IIBI a couple of months ago. Its 178 employees were given the option of voluntary retirement or positions in other institutions. Most opted for the latter. |
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| Formal closure would take some more time as formalities were yet to be completed, the source admitted. |
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| IIBI has been grappling with a shrinking balance-sheet, loaded with sick or ailing accounts. |
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| IIBI, originally called the Industrial Reconstruction Bank of India (IRBI), was set up to handle the accounts of sick companies and restructure them. |
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| IRBI was constituted by an Act of Parliament several decades ago and performed its tasks with competence in the sense that it was in the black, the source pointed out. |
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| However, following the creation of new generation asset reconstruction companies, IIBI lost its relevance. |
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| The BJP-led NDA government had promised funding to set IIBI on its feet in more than one Union budget but the promised funding had never emerged. |
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| In a parallel development, IIBI was offered to several banks for a possible takeover, but as it had neither a branch network nor a portfolio of attractive assets, it failed to find a saviour. |
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| As a last measure, the chairman of Kolkata's Allahabad Bank was also appointed the chairman of IIBI to keep the institution running. |
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| Sources said the closure of IIBI while Parliament was in session was bound to attract criticism from the Left Front. |
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