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On October 1 this year, when IDFC becomes a bank, only 30 per cent of its eligible loan book will be exempted from statutory liquidity ratio (SLR) and cash reserve ratio (CRR) stipulations, against expectations of 100 per cent relief. After that, all its incremental loans will also be exempted from such stipulations.
Group financial officer Sunil Kakar said through a circular dated July 15 last year, the Reserve Bank of India had provided clarity on SLR and CRR exemption.
On January 1 this year, IDFC’s loan book stood at Rs 54,000 crore. Analysts said of this, about 70 per cent, or Rs 37,000-38,000 crore of loans, were projects loans. Applicability of the 30 per cent CRR and SLR exemption at that time would have meant loans worth Rs 10,000-11,000 crore would have been exempted; that too, if IDFC had matching long-term bonds.
Vikram Limaye, IDFC’s managing director, said the fact that the company’s profits were down had largely to do with provisions made till December-end, which were substantially higher than in the year-ago period. Provisions would rise in the next couple of quarters, Limaye said.
For the quarter ended December, IDFC had posted a 16 per cent drop in consolidated net profit at Rs 422 crore. Its provisions for stressed loans rose 286 per cent to Rs 182 crore from Rs 47 crore a year earlier.
