The employees associations of Industrial Finance Corporation of India have requested the government to merge it with a strong bank or financial institution.

The names of banks and FIs mooted for taking over IFCI include Industrial Development Bank of India, State Bank of India and Life Insurance Corporation.

Also Read Govt writes off Rs 1,573 cr loan to IFCI IFCI will use grant to liquidate liabilities

The Coordination Committee of Employees and Officers Union of IFCI gave representations to the finance ministry on November 21, 2002 and again on July 9, this year on this issue, official sources said in New Delhi on Tuesday.

The employees union proposed the merger plans in view of the financial condition of IFCI and the insecurity of their services, they said.

Although the ministry has considered the representations, it ruled out a merger between IFCI and IDBI.

Sources in the banking circle said the merger of IDBI and Kolkata-based IIBI may be considered once the IDBI Act is repealed and the FI is corporatised.

The Union Cabinet has already approved the conversion of IDBI into a universal bank, which will also continue development financing. It, however, took no decision on the proposed merger of IDBI with IIBI.

In case of IFCI, government has written off loans worth over Rs 1,573 crore (Rs 15.73 billion) to improve its financial conditions.

However, it is not sure whether the government will accept the proposal to merge IFCI with either SBI or LIC considering that the core business of both these players are different.

Instead, the government wants IFCI to stand on its own feet. The FI has, in fact, improved its financial position in the last few quarters.