IndusInd plans to float ARC

IndusInd Bank plans to float an asset reconstruction company (ARC), subject to Reserve Bank of India's (RBI) approval.

"IndusInd is exploring the option of an ARC as it has achieved success in recovery of bad debt and has developed skills and expertise in the field," said Bhaskar Ghose, managing director.

The bank also plans to float a capital market subsidiary in partnership with an overseas bank, subject to the central bank's approval. The subsidiary will offer wealth management services.

The bank is looking at roping in other financial investors, domestic and foreign. IndusInd will look to hold 30 per cent in the ARC, whereby it would be in a position to have a management say and be involved in policy making, Ghose said.

The private sector bank has a non-performing asset (NPA) recovery department. Its net non-performing assets (NPA) as on March 2005 stood at 2.71 per cent.

The bank has been able to recover around Rs 152 crore worth of bad loans in 2004-05. It acquired assets such as properties in its recovery of Rs 37.84 crore during the year.

With permission from the RBI, the bank has utilised reserves of Rs 118.02 crore for additional write offs of NPAs.

On its plans for wealth management, Ghose said: "The bank is aiming at entering new business segments that offer prospects of higher growth."

The idea of a joint venture partner would offer best of products, while the bank would offer the infrastructure and client base, he added.