IDBI Bank Mulls To Set Up Two Subsidiaries

Bangalore: IDBI Bank Ltd has proposed establishing a private equity fund and a mutual fund as separate subsidiaries in a bid to become a complete financial powerhouse. Both these arms will be established this year, once clearances from the Reserve Bank of India, Securities Exchange Board of India and the Government are received. The corpus for the private equity arm would be decided only after the clearances. The mutual fund subsidiary would be established by IDBI Bank on its own, via it was not averse to any foreign joint venture partner. The bank planned to add 100 new branches each year for the next five years. This included five branches in Moscow, Beijing, Singapore, Bahrain and a representative office in Dubai.
Deposits during the last financial year were Rs 42,000 crore. Advances comprised Rs 62,000 crore for the period. The UWB acquisition contributed Rs 9,000 crore of business to the bank. The bank was still considering a hike in the prime lending rate, which currently stands at 11.75 per cent. They are amenable to stretching the loan maturities, whenever borrowers want the option. The bank had made cash recoveries of Rs 2,000 crore, through the Stressed Asset Stabilisation Fund (SASF), during the last two years. This year the bank is aiming another Rs 1,000 crore. The recoveries would contribute to the bank's bottomline, since the recoveries comprised zero cost funds. The bank was also continuing with its infrastructure focus. For the purpose the bank has earmarked Rs 15,000 crore for various infrastructure projects.