The Hindu Business Line : Core group of lenders to frame IFCI recast plan

Besides representation from IFCI, the group would include officials of IDBI, Life Insurance Corporation, State Bank of India, Punjab National Bank, Bank of Baroda and Oriental Bank of Commerce.

It will work out the details of restructuring of principal and interest of the troubled IFCI shortly.

Representative of banks also decided to work out a "relationship" with IDBI to enable the term-lending institution to convert into a universal bank.

The decision was taken at a meeting of IFCI stakeholders here on Tuesday. ``There would be bailout. But there has to be restructuring of principal and interest of IFCI's debts. The proposal was put forth before the banks. They were examined in detail. The mood was very positive,'' the IDBI Chairman, Mr P.P. Vora, said after a meeting.

The meeting was attended by the chairmen and managing directors of leading banks including those of SBI, Punjab National Bank, Bank of Baroda, Central Bank of India, Corporation Bank, Oriental Bank of Commerce, Punjab and Sind Bank, Indian Bank and UCO Bank.

Mr Vora said that the core group would meet next week to chalk out the modalities of the restructuring package for IFCI, which would be then taken up by the respective bank boards for approval.

Both SLR bonds, which qualify for the banks' statutory liquidity ratio, and non-SLR bonds would be restructured, which would assist IFCI to improve its capital adequacy ratio and provide relief in terms of interest costs.

In the case of IDBI, Mr Vora said that that the FI had not sought any bailout since it had been ``constantly'' meeting the debt repayment obligations.

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