New Delhi, Aug 13: The industrial Development Bank of India (IDBI) is all set to raise low-cost deposits and also continue its function as a development financing institution (DFI) soon after Parliament passes the bill to repeal the IDBI Act. A jubilant IDBI chairman PP Vora said that it plans to raise deposits of all kinds as it is done by banks after the conversion, which will enable it to reduce cost of borrowing and make it more profitable.
“On the liability side, we will raise all types of deposits from term deposits to savings and current account deposits,” he said. On the asset side, he said, “We will go for term lending, project financing, foreign currency lendings and other types of lending operations as we are doing now.”
The DFI was under financial strain as its cost of deposits was more than its cost of lending, that had earlier caused asset-liability mismatch. But the DFI’s conversion into a bank would ensure that IDBI is able to raise cheap deposits and improve profitability. Bureau Report