Idbi Acts On Booz Allen Report But Alters Script
The Industrial Development Bank of India (IDBI) has begun implementing recommendations made by international consultants Booz Allen & Hamilton, with certain deviations.
The financial institution, which kicked off the implementation process last month, is still adhering to the old norm of allowing zonal offices to handle term loans for projects below Rs 100 crore. Booz Allen had suggested that this figure should be doubled to Rs 200 crore, which would ensure adequate decentralisation.
According to sources, this is a temporary measure as the financial institution is undergoing massive restructuring exercises and is in a transitional phase. However, it is not known when the institution will implement this recommendation.
Meanwhile, IDBI has formed a central credit committee and four zonal committees in Calcutta, Chennai, Mumbai and New Delhi. Moreover, existing delegated powers for sanctions of assistance with individual executives stand withdrawn except to the extent of special powers.
The newly-formed credit committee is headed by IDBI executive director P V Narsimhan.
The other four EDs included in the committee are B K Taparia, P S Subramanyam and A Lahiri. The committee also has four chief general managers namely A K T Chari, S G Gulati, Mohd Zakir and T M Nagarajan.
The functions of the credit committee will include scrutiny of proposals for detailed appraisal, sanction assistance under powers delegated to it, review of progress and performance of assisted projects, quality of portfolio and asset classification and provisioning at quarterly intervals, review of policies, products and pricing relating to financial operations and initiation of action as may be necessary.
The credit committee will have the powers to sanction assistance to a company up to Rs 50 crore at a time in all forms (loans, deferred payment guarantee, direct subscription, leasing) within a company-wise exposure limit (outstanding plus undisbursed sanction) of Rs 200 crore.
Under project finance, the committee shall consider projects with cost not exceeding Rs 200 crore.
The IDBI has already charted a Rs 2500-crore working capital loan scheme for disbursals during the current fiscal.
Booz Allen had recommended that IDBI enter the arena of working capital finance.