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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%.

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.

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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%.

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.

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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.

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

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Shri J.N.Godbole

Shri R.S.Agarwal

Shri A.K.Doda

Shri R. Jayaraman Iyer

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:

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EQUIPMENT FINANCE

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.

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,

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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.

TO PROVIDE LONG TERM FINANCE FOR NEW PROJECTS AND

EXPANSION, DIVERSIFICATION AND MODERNISATION OF EXISTING

PROJECTS.

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PROJECT FINANCE BY IDBI

OBJECTIVE

TYPES OF ASSISTANCE

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TERM LOAN, UNDERWRITING, DIRECT SUBSCRIPTION TO EQUITY

CAPITAL AND DEFERRED PAYMENT GUARANTEE.

ANY INDUSTRIAL CONCERN CONFORMING TO THE DEFINITION IN

SECTION 2(C) OF IDBI ACT.

RUPEE AND FOREIGN CURRENCY LOAN

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

1.5:1

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ELIGIBILITY

PROMOTERS' CONTRIBUTION

NATURE OF ASSISTANCEELIGIBILITY

DEBT EQUITY RATIO

INTEREST RATE RUPEE LOAN

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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

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.

1% OF LOAN AMOUNT.

FIRST CHARGE ON MOVABLE AND IMMOVABLE FIXED ASSETS.

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INTEREST RATE FOREIGN CURRENCY LOAN

UP-FRONT FEE

SECURITY

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IN QUARTERLY INSTALMENTS TO BE FIXED ON CASE TO CASE BASIS

DEPENDING ON PROJECTED CASH FLOW OF THE BORROWER.

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

PROJECT FINANCE

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DOCUMENTATION

REPAYMENT

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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 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.

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SANCTIONS BY IDBI

(AMOUNT IN CRORES)

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DISBURSEMENTS BY IDBI

(AMOUNT IN CRORES)

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LOANS AND ADVANCES

Scheduled bank, state co-operative bank & other Financial institutions

Scheduled bank, state co-operative bank & other

Financial institutions

24109528330

To industrial concerns 470341935717

Call money 2359500000

Total 496810964048

Amount in Lacks.

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OPERATIONAL HIGHLIGHTS

1997-98 1998-99 1999-00 2000-01 2001-02Total Sanctions 20632.2 20842.4 23712.5 25417.6 16034.1Direct 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 11157.9Direct 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

products 291.5 4 269.9

5.0

Drugs &

Pharmaceuticals 378.0 5.2 265.9

4.9

Paper & Paper

Products 255.5 3.5 196.6

3.6

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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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Industry wise classification of NPA’s (Direct Loans) As on 31 March 2002

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