IIBI seeks Rs 500 crore recapitalisation aid

 Another restructuring option provided by IIBI to the finance ministry is merger with a bank or financial institution and closure.  Institutional sources told Business Standard that the institution, which is expected to post operating losses of over Rs 100 crore during 2002-03, would require a financial assistance of up to Rs 500 crore.  The IIBI board is meeting tomorrow to consider the audited annual accounts for 2002-03.  United Bank of India chairman and managing director Madhukar, who is also a part-time chief of IIBI, confirmed the development. He said the proposal was sent to the finance ministry last month.  Institutional sources said the Kolkata-headquartered IIBI has also approached lenders for restructuring their debt by reducing interest rates on loans extended to the financial institution and also roll-over of investments.  They added that the institution was facing an asset-liability mismatch due to a fall in lending rates even though the cost of funds for IIBI remained high.  They added that given the small size of operations with an asset base of around Rs 7,000 crore, the institution will find it tough to survive on its own.