Govt to split IFCI into two; to segregate good, bad assets
By Our Banking Bureau | 15 Apr 2003
New Delhi: India’s ministry of finance has decided to split Industrial Finance Corporation of India (IFCI) down the middle by segregating the good assets and the bad assets into two entities.
The
restructuring of IFCI, along with that of Industrial Development
Bank of India (IDBI) and Industrial Investment Bank of
India (IIBI), is to be completed by 30 June 2003.
The plans for restructuring IFCI are on lines with the report that had been submitted by McKinsey & Co, which had mooted the idea of splitting IFCI into a ‘good bank.’ Which means it would contain all the standard assets of the institution, and a ‘bad bank' that would be saddled with the bad assets. “We have decided to split IFCI into a ‘good bank’ and a ‘bad bank’,” says a senior finance ministry official.
He says while the bad bank will be handed over to the asset reconstruction company, Asset Care Enterprise (ACE), being floated by IFCI itself, the good bank will remain an independent