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INDUSTRIAL DEVELOPMENT BANK OF INDIA

"We are envisaging the new Industrial Development Bank of India

as a central coordinating agency, which ultimately will be

concerned, directly or indirectly, with all the problems or

questions relating to the long and medium term financing of

industry, and will be in a position, if necessary, to adopt and

enforce a system of priorities, in promoting future industrial

growth"

MILESTONES

• Set up in July 1964 by an Act of Parliament as a wholly-

owned subsidiary of Reserve Bank of India.

• In 1976, ownership transferred to Government of India.

• Played a dominant role in balanced industrial development.

• Set up SIDBI as a wholly owned subsidiary. In 2001, IDBI's

shareholding in SIDBI reduced to 49%.

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• In 1992, introduced Deep Discount Bonds; registered path-

breaking success.

• In 1993, set up IDBI Capital Market Services Limited as

wholly-owned primary dealership company.

• In 1994, set up IDBI Bank Limited.

• In 1994, IDBI Act amended to permit public ownership upto

49%.

• In July 1995, Initial Public Offer of Equity raised over Rs.20

billion, reducing Government stake to 72.14%

• In 1999, entered into a JV agreement with Principal

Financial Group, USA for participation in equity and

management of IDBI Investment Management Company

Ltd., erstwhile a 100% subsidiary of IDBI.

• In March 2000, set up IDBI Intech Limited as a subsidiary to

undertake captive IT- related activities.

• In June 2000, part of Government share-holding converted

to preference capital, since redeemed in March 2001;

Government stake currently 58.47%.

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• In August 2000, IDBI became first All India Financial

Institution to obtain ISO 9002:1994 Certification for its

treasury operations.

• Also became the first organisation in Indian financial sector

to obtain ISO 9001:2000 Certification for its forex services.

• In March 2001, set up IDBI Trusteeship Services Limited

under Companies Act 1956 to provide technology-driven

information and professional services to subscribers and

issuers of debentures.

• In April 2001, IDBI appointed Boston Consulting Group India

Private Limited (BCG) as consultant to draw up a road map

for conversion into a universal bank.

• In March 2002, Government of India announced proximate

corporatisation of IDBI.

• IDBI is currently undertaking calibrated measures to move

towards Universal Banking.

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The Industrial Development Bank of India (IDBI) was

established in 1964 under an Act of Parliament. It was initially

set up as a wholly owned subsidiary of the RBI with a mandate of

providing credit and other facilities for balanced industrial

development. In 1976, the ownership of IDBI was transferred to

the Government of India and it was accorded the status of

principal financial institution in the country for co-ordinating the

working of institutions, engaged in financing, promoting and

developing industry, and also assisting in the development of

such institutions to a great extent.

Following amendment to IDBI Act in October 1994 to

permit public ownership up to 49% of its issued capital, IDBI

went in for a public issue in July 1995. The shareholding of

Government of India in IDBI currently stands at 58.47%.

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MANAGEMENT AND ORGANIZATION

MANAGEMENT TEAM
BOARD OF

DIRECTORS
Mr. P.P. Vora Chairman & Managing Director, IDBI
Mr. V. Govindarajan Director (Government Nominee)
Mr. D.C.Gupta Secretary(Financial Sector)
Dr. K.S. Parikh Director (Shareholders' Nominee)
Mr. R.N. Dhoot Director (Government Nominee)
Mr. S. Datta Director (Government Nominee)
Mr. K.N. Murthy Director (Government Nominee)
Shri R.V. Gupta Shareholders' Representative
Shri M.G. Bhide Shareholders' Representative
Dr. J.J. Irani Shareholders' Representative

EXECUTIVE DIRECTORS
Shri J.N.Godbole
Shri R.S.Agarwal
Shri A.K.Doda
Shri R. Jayaraman Iyer

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Shri S.G.Gulati
Shri V. Venkateswarlu

PRODUCTS & SERVICES

IDBI has played a pioneering role in fulfilling its mission of

promoting industrial growth through financing of medium and

long-term projects, in consonance with national plans and

priorities. Over the years, IDBI has enlarged its basket of

products and services to industrial concerns. An ‘industrial

concern’ as defined in the IDBI Act is very comprehensive,

covering almost the entire spectrum of industrial activities,

including manufacturing and services. IDBI provides financial

assistance both in rupee and foreign currency for greenfield

projects, expansion, modernization and diversification purposes.

Further, in order to cater to the diverse needs of

corporate clients, IDBI has structured various products like:

 EQUIPMENT FINANCE

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 ASSET CREDIT

 CORPORATE LOANS

 DIRECT DISCOUNTING

 WORKING CAPITAL LOANS

 FILM FINANCING

 EQUIPMENT LEASE

 VENTURE CAPITAL FUND

 PROJECT FINANCE

 BILLS REDISCOUNTING

 FINANCING RECEIVABLES

 REHABILITATION FINANCE

 LINES OF CREDIT FOR EXECUTION OF TURNKEY

CONTRACTS.

IDBI also provides indirect financial assistance through

refinancing of loans extended by primary financial institutions

and by way of rediscounting of bills of exchange arising out of

sale of indigenous machinery on deferred payment terms.

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IDBI has also been providing merchant banking and a wide

array of corporate advisory services as part of its fee-based

activities. These include professional advice and services for

issue management, private placement of equity/debt instruments,

project evaluation, credit syndication, share valuation, corporate

restructuring, including mergers and acquisitions, and

divestment of equity. The Bank also offers a number of forex-

related services on a commission basis, including opening of

Letters of Credit and remittances of Foreign Currency on behalf

of its assisted companies for import of its goods and services.

Project finance by idbi

Objective

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TO PROVIDE LONG TERM FINANCE FOR NEW PROJECTS AND

EXPANSION, DIVERSIFICATION AND MODERNISATION OF

EXISTING PROJECTS.

Types of Assistance

TERM LOAN, UNDERWRITING, DIRECT SUBSCRIPTION TO

EQUITY CAPITAL AND DEFERRED PAYMENT GUARANTEE.

eligibility

ANY INDUSTRIAL CONCERN CONFORMING TO THE DEFINITION

IN SECTION 2(C) OF IDBI ACT.

Nature of Assistance
eligibility

RUPEE AND FOREIGN CURRENCY LOAN

Promoters' Contribution

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25% OF THE PROJECT COST - MINIMUM - NORMALLY EXPECTED.

Debt Equity Ratio

1.5:1

Interest Rate Rupee loan

BASED ON MINIMUM TERM LENDING RATE FIXED FROM TIME TO

TIME. ACTUAL RATE WITHIN THE PREVAILING RATE BAND

DEPENDS UPON CREDITWORTHINESS OF BORROWER AND RISK

PERCEPTION. ALSO, THERE IS AN OPTION OF FLOATING RATE

OF INTEREST LINKED TO LONG TERM PRIME RATE (LTPR) +

RISK SPREAD. INTEREST IS PAYABLE QUARTERLY

Interest RATE FOREIGN

Currency Loan

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FLOATING RATE BASED ON LIBOR DEPENDING UPON THE

SOURCE OF THE CURRENCY PLUS A FIXED SPREAD ACCORDING

TO THE RISK PERCEPTION AND MATURITY OF THE LOAN.

Up-front Fee

1% OF LOAN AMOUNT.

Security

FIRST CHARGE ON MOVABLE AND IMMOVABLE FIXED ASSETS.

Repayment

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IN QUARTERLY INSTALMENTS TO BE FIXED ON CASE TO CASE

BASIS DEPENDING ON PROJECTED CASH FLOW OF THE

BORROWER.

Documentation

• LOAN AGREEMENT

• DEED OF HYPOTHECATION

• PERSONAL GUARANTEE FROM MAIN PROMOTERS

• UNDERTAKINGS FROM PROMOTERS FOR:

 MEETING SHORTFALL IN PROJECT COST

 NON-DISPOSAL OF SHARE HOLDINGS BY PROMOTERS

• UNDERTAKING FROM MD FOR NON-RECEIPT OF

COMMISSION, IF COMPANY IS IN DEFAULT TO IDBI

• NO OBJECTION CERTIFICATE FROM IT DEPT. UNDER

SECTION 281(I)(II) OF IT ACT

• RESOLUTION UNDER SECTION 293 (1) (A) AND 293(1)(D) OF

COMPANY'S ACT

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PROJECT FINANCE

OPERATIONAL PERFORMANCE OF IDBI DURING

JULY-SEPTEMBER 2002

Aggregate sanctions and disbursements under all schemes of

assistance during April-September 2002 stood at Rs.754 crore

and Rs.1257 crore respectively. Infrastructure sector

constituents accounted for 27% and 26% of total sanctions and

disbursements respectively during this period. The Bank

continued to be deliberately selective with regard to fresh

assistance, keeping overall asset quality of portfolio in view.

Sanctions and drawals under project finance during the

year 2001-02 were at Rs. 4993 crore and Rs.3201 Crore

respectively as against Rs. 10443 crore and Rs. 5466 crore

during the previous year. The decline was on account of

deceleration in demand for Project finance, particularly from the

manufacturing sector. Assistance by way of guarantees, too

came down from Rs. 1362 crore in 2000-01 to Rs. 353 srore in

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2001-2002, a decline of 74.1%. underwriting and direct

subscription to euity/debt instruments increased by 5.2% to

Rs.539 crore from Rs. 513 crore. During the year 2001-02, twenty

units were sanctioned assistance under Technology Upgradation

Fund Scheme (TUFS) aggregating Rs. 162.6 crore, while

disbursements stood at Rs. 381.8 crore.

SANCTIONS BY IDBI

(AMOUNT IN CRORES)

30000
18000
25000
16000
14000
20000
12000
15000
10000
10000
8000
6000
5000
4000
0
2000
1997-98 1998-99 1999-00 2000-01 2001-02
0 14
1997-98 1998-99 1999-00 2000-01 2001-02
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(AMOUNT IN CRORES)

LOANS AND ADVANCES

Scheduled bank, state co-operative bank & other Financial

institutions

Scheduled bank, state co-operative bank & other 24109528330

Financial institutions
To industrial concerns 470341935717

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Call money 2359500000

Total 496810964048

Amount in Lacks.

5000000

4000000

3000000

2000000 East

1000000

0
BANKS & CALL
FI's MONEY

OPERATIONAL HIGHLIGHTS

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1997-98 1998-99 1999-00 2000-01 2001-02

Total
Sanctions 20632.2 20842.4 23712.5 25417.6 16034.1
Direct
Finance 19293.7 19981.2 21745.1 23994 15206.9
% of Total 93.5 95.9 91.7 94.4 94.8

Refinance 372.9 91.6 241.6 363 187.3

% of Total 1.8 0.4 1.0 1.4 12

Bills Finance 906.6 674.6 723.3 285.7 122.9

% of Total 4.4 3.2 3.1 1.1 0.8

others 59 95 1002.5 774.9 517

% of Total 0.3 0.5 4.2 3.1 3.2

Total
Disbursement 15368.8 14473.4 17062.8 17473.5 11157.9
Direct
Finance 14350.4 13800.8 15447.9 16168.8 10333.6
% of Total 93.4 95.4 90.5 92.5 92.6

Refinance 334.9 102.1 229.5 331.7 158.8

% of Total 2.2 0.7 1.4 1.9 1.4

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Bills Finance 624.5 475.5 527.9 201.8 84.9

% of Total 4 3.3 3.1 1.2 0.8

others 59 95 857.5 771.2 580.6

% of Total 0.4 0.6 5 4.4 5.2

Outstanding
Assistance 51568.9 57057.9 60580.5 59420.9 58036.2

Industry wise classification of NPA’s (Direct Loans)

As on 31 March

INDUSTRY 2001 2002

Amount % of Total Amount % of Total
Iron and Steel 720.9 9.9 838.5 15.5
Cotton Textile 973 13.3 738.2 13.7
Food 563.6 7.7 482.1 8.9
Chemicals 538.7 7.4 363.7 6.7
Metal products 472.2 6.5 356.7 6.6
Plastic & Plastic 5.0

products 291.5 4 269.9

Drugs & 4.9

Pharmaceuticals 378.0 5.2 265.9

Paper & Paper 3.6

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Products 255.5 3.5 196.6

Other textiles 178.6 2.5 173.9 3.2
Manmade fibre 312.6 4.3 158.3 2.9
Electronics 243.2 3.3 141.4 2.6
Electrical

machinery 201.8 2.8 129.8 2.4

Sugar 139.7 1.9 128.1 2.4
Services 71.3 0.9 111.6 2.1

INDUSTRY WISE CLASSIFICATION OF NPA’S

(DIRECT LOANS)
As on 31 March 2001

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Iron&Steel

Cotton Textile

Food

Chemicals

Metal products

Plastic & Plastic

products
Drugs &
Pharmaceuticals
Paper & Paper
Products
Other textiles

Manmade fibre

Electronics

Electrical
machinery
Sugar

Services

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Industry wise classification of NPA’s (Direct Loans)

As on 31 March 2002

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Iron&Steel

Cotton Textile

Food

Chemicals

Metal products

Plastic & Plastic

products
Drugs &
Pharmaceuticals
Paper & Paper
Products
Other textiles

Manmade fibre

Electronics

Electrical
machinery
Sugar

Services

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