The finance ministry is firming up plans to merge the Industrial Investment Bank of India (IIBI) with the Industrial Development Bank of India (IDBI) once the IDBI Repeal Bill is cleared by Parliament.
The merger will result in an entity with an asset base of around Rs 70,000 crore. The new entity will be permitted to undertake banking activities.
Officials said a merger between IDBI and IIBI makes more sense because the latter is a smaller organisation and the two institutions have common exposure in many cases. IIBI has an asset base of about Rs 7,000 crore compared to IDBI whose asset size stood at Rs 62,000 crore as on March 31, 2002.
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A committee headed by finance secretary S Narayan has also been constituted to lay out the road map for two other development lending institutions, IDBI and IFCI. The government is awaiting the report of the Parliamentary standing committee on finance before taking a decision on the mode for IDBI to foray into banking.
The ministry has, however, turned down a proposal to merge IDBI, IFCI Ltd and UTI-I