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IDBI, ICICI panels to usher in corporate governance in India

The Industrial Development Bank of India and the Industrial Credit and Investment Corporation of India have decided to form two separate working groups to introduce corporate governance in financial institutions and the corporate sector.

IDBI chairman G P Gupta announced this in Calcutta today. He claimed that this is the first step towards stabilising the industrial scenario in the country.

He told members of the Indian Chamber of Commerce that the present low industrial growth had created a number of peculiar problems for both public and private sector industries as well as financial institutions and other intermediaries.

This necessitated immediate introduction of a code of ethics like corporate governance for all.

Gupta stated that though the decision had already been taken, no date had yet been fixed for their formal launch.

He, however, assured the members that the groups would be set up very soon . "We are also working on the formation of the groups in close co-operation with the financial sector," Gupta said.

In the wake of the government decision to divest its stake in the public sector units, the need for corporate governance had become an absolute necessity, he said. "Transparency and good business ethics should go hand in hand in both private and public sectors."

Gupta said in terms of both sanctions and disbursement of loans, the bank had achieved nearly 20 per cent growth in just one year since 1997-98.

At least one-third of the total sanctions of over Rs 255 billion last year was earmarked for infrastructure projects in various sectors. He assured increased assistance.

Gupta said credit should go to the FIs for being able to withstand the recent south Asian economic crisis. Though the crisis had proved beyond doubt the fundamental strength of the Indian economy, it had also exposed that how vulnerable the situation could be.

Gupta made it clear that except in cases of restructuring, the IDBI would not be ready to provide fund for VRS schemes anywhere in India.

UNI

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