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IFCI exposure to single client at 126.72%

BS Banking Bureau

Among the three leading financial institutions, IFCI Ltd's exposure to a single largest borrower is the highest. The beleaguered institution's exposure stands at 126.72 per cent of its capital funds.

In comparison, for ICICI, this figure stands at 31.7 per cent while in the case of Industrial Development Bank of India (IDBI) it is 15.25 per cent.

IFCI and ICICI have to cut their exposure drastically to meet the revised Reserve Bank of India prudential norms, which will tighten the exposure ceiling for single borrower to 15 per cent of the capital funds of financial institutions effective March 2002.

Even today, both these institutions exceed the prudential norms which allow for an exposure ceiling on single borrower at 20 per cent.

IFCI's exposure to the largest borrower group stands at 200.58 per cent, while that of ICICI is 45.2 per cent, and IDBI at 23.58 per cent.

According to the central bank norms, the permissible limit on group exposure has been capped at 50 per cent of capital funds. This group exposure will further be adjusted to 40 per cent by March 2002. However, in the case of infrastructure projects, the limit is extendable by another 10 per cent up to 50 per cent.

All the three financial institutions have the maximum exposure as a percentage of total loan assets to the iron and steel sector.

While IFCI's exposure stands at 19.27 per cent, IDBI's exposure is to the tune of 13.26 per cent and ICICI's at 11.4 per cent. The second highest exposure the financial institutions have is in the power sector.

IFCI's exposure stands to power stands at 14.24 per cent, ICICI at 11 per cent and 10.83 for IDBI.

IDBI and IFCI have considerable exposure to the textile industry, at 9.41 per cent and 5.41 per cent of total loan assets respectively.

Textiles, however, does not feature in ICICI's top five industrial sectors exposure. ICICI's third largest exposure in the industrial segment is to chemicals and chemical products sector, which accounts for 7.2 per cent. IFCI has an exposure of 5.20 per cent to this sector.

IDBI's exposure to the oil sector is the third highest qualifying for 9.5 per cent of total loan assets. ICICI's exposure to this sector in contrast stands at 4.75 per cent.

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