IDBI shortlists 3 consultants to script conversion path

The Industrial Development Bank of India (IDBI) has shortlisted three consultancy firms "" PricewaterhouseCoopers, Tata Consultancy Services (TCS) and Boston Consulting Group "" for drawing the roadmap for its conversion into a bank.

The government in December had approved the IDBI Repeal Bill, enabling the financial institution's conversion into a universal bank.

According to sources, the mandate for the successful consultant will be for drawing the entire transformation blueprint "" from designing the logo of the bank to risk management, technology platform, human resource development and branches. Going by the board approval, IDBI is slated to complete the conversion by October 1 but internally the institution is getting ready to become a bank by July 1.

According to the plan, IDBI Home Finance "" a 100 per cent subsidiary of the institution "" will be merged with IDBI since that would allow the newly formed entity to get into housing finance business.

The newly-converted bank will be granted a five-year holiday from maintaining statutory liquidity ratio.

However, on the cash reserve ratio (CRR) front IDBI would have to apply to the Reserve Bank of India for the governing regulations. The new entity would have to maintain a CRR level of around Rs 2,000 crore.

IDBI is expected to start operations with around 100 branches. Union finance minister Jaswant Singh had recently indicated that even after becoming a bank, the entity will continue with its development finance activities.

In the medium term IDBI Bank is expected to be merged with the institution in its new avatar of a bank.

IDBI Bank's managing director G V Nageshwar Rao had sometime back said that the bank would work closely with IDBI in the transformation phase as the parent converts into a bank.