New Delhi: Industrial Finance Corporation of India (IFCI) has pruned its net loss to Rs 260 crore during the fiscal ended 31 March 2003, against a net loss of Rs 888 crore registered during the previous year.
In a release issued here today, IFCI has said the operational income for 2002-03 stood at Rs 1,403 crore, compared to Rs 2,219 crore during the previous year.
The term lending institution has said the major reasons for the decline in operational income were reduction of business assets by around 11 per cent through prepayments and negotiated settlements, downward revision of interest rates in respect of certain major loan accounts in line with the overall decline in interest rates in the economy and reversal/non-recognition of income on fresh non-performing assets (NPAs).
In view of the fresh accretion of NPAs during the year, the provisions against bad assets for the year increased to Rs 1,882 crore from Rs 631 crore for the previous year.
IFCI has said that it could make substantial savings in terms of borrowing costs during the year that declined from Rs 2,393 crore to Rs 1,558 crore due to restructuring of liabilities with major stakeholders, including the Indian government.
As a result of this restructuring, the average cost of borrowings has come down from 12.39 per cent to 9.29 per cent.
The institution has said that the government has agreed to provide financial support by taking certain guaranteed and other liabilities and paying the interest differentials on certain statutory liquidity ratio borrowings. IFCI has already received Rs 523 crore from the government and an additional Rs 1,573 crore is expected soon.