Financial Daily from THE HINDU group of publications
Thursday, Mar 30, 2006
Financial Daily from THE HINDU group of publications Thursday, Mar 30, 2006 |
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Industry & Economy
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Securitisation Money & Banking - Public Sector Banks Indian Bank sells priority sector loans, raises Rs 550 cr M. Ramesh
Chennai , March 29 Indian Bank has raised Rs 550 crore by selling off a part of its priority sector loans to other banks, in what is called `inter-bank participation' deal, highly placed sources in the bank told Business Line. Under the deal, Indian Bank will buy back the assets later. In the meantime, if any default occurs in the loans sold off, it will bear 60 per cent of the losses, they said. Through this route, the bank has been able to raise the resources at a rate of 5.5 per cent. It got this "attractive rate" because the banks that bought the portfolio were under pressure to meet their priority sector lending targets, the sources said. In another development in Indian Bank, the Union Government has allowed Ind Bank Housing Ltd, a subsidiary of the bank, to be classified as `financial institution' for the purposes of the SARFAESI Act. The notification to this effect was issued on March 16. The implication of the notification is that Ind Bank Housing will be able to use SARFAESI and recover at least Rs 50 crore of delinquent loans. Meanwhile, the board of directors of Indian Bank, which met on Wednesday, cleared a proposal to recruit around 60 specialists. These specialists include `corporate communications' experts needed in the run up to the bank's initial public offering. The IPO is expected soon after the Union Government of India approves a capital restructuring proposal of the bank.
More Stories on : Securitisation | Public Sector Banks
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