Iibi To Finalise Plr Cut Tomorrow

The Industrial Investment Bank of India (IIBI), the new look avatar of the erstwhile Industrial Reconstruction Bank of India is all set to slash its prime lending rate (PLR) shortly in the wake of similar exercises by the other three domestic financial institutions.

The IIBI, a fledgling FI is expected to finalise the new rates in the institution's board meeting slated for Thursday (tomorrow) in Mumbai.

The board has 11 members including the chairman-cum-managing director G Goswami.

Two earlier members of the erstwhile IRBI, G Kathuria, chairman, Bank of India and Y V Reddy, deputy governor, Reserve Bank of India had resigned after the last board meeting of the bank in March 28.

 

Besides Goswami, the board has C M Vasudev, additional secretary, banking, government of India, S Doraiswamy, CMD, Central Bank of India, M S Verma, managing director, SBI, Mumbai, A K Singh, managing director, Bihar State Finance Corporation, B K Agarwal, managing director, Maharashtra State Finance Corporation, A K Mohapatra, joint secretary, department of heavy industry, government of India, V Kapoor, executive director IDBI, Mumbai, G Krishnamoorthy, managing director LIC, Mumbai, S Narayan, managing director, SIDBI, Lucknow, and K K Mudgil, executive director NHB, New Delhi, as its members

The institution is looking at the option of cutting the PLR for both short term as well as long term lending, to make its rates attractive to prospective borrowers as well as to establish parity of sorts with the elder members of the club of financial institutions. At present, the PLR is only for the long term at 17.5 per cent.

Last month, the Industrial Credit & Investment Corporation of India had drastically slashed its medium term lending rate to 13.5 per cent for all advances of less than 30 months.

For the time period beyond 30 months the rate is 15 per cent which equals the lending rate for the Industrial Development Bank of India's PLR for both long term and short term.

The Industrial Finance Corporation of India (IFCI) also slashed its PLR to 15 per cent. However, all the FIs have decided to keep the maximum interest rate band above the PLR constant at 3.5 per cent.

The newly-formed financial institution has already mobilised Rs 200 crore through private placements out of a targeted Rs 700 crore to be raised through debt placement during the current year.

The IIBI is considering offer of equity to global financial institutions such as the Asian Development Bank and the International Finance Corporation. G Goswami was in Manila last week to attend the World Conference of Financial Institutions in the Asia Pacific.