SIDBI to set up asset reconstruction firm in 6-9 months: CMD

NEW DELHI: Small Industries Development Bank of India (SIDBI) on Tuesday said it is in talks with leading public and private sector banks to set up an asset reconstruction firm for small and medium enterprises in the next 6-9 months.
    
"The asset reconstruction company is expected to have Rs 100 crore equity and 7-10 partners," bank's Chairman and Managing Director R M Malla said.
    
He said the company may also include some global players which have expertise in the SME sector.
    
An asset reconstruction company purchases bad debts from financial institutions at a lower value and sells the same after reconstruction.
    
Meanwhile, Malla said SIDBI Venture Capital Fund, a subsidiary of the company, has committed Rs 150 crore to a venture fund for IT sector. However, it is yet to contribute Rs 500 crore to SME Growth Fund.
    
IT fund is for start ups, while SME Growth Fund is for start ups as well as expansion of existing businesses.
    
Earlier, speaking at the seminar, Malla mooted the idea of mutual fund and insurance products for the microfinance sector.
    
He said SIDBI would be keen to take part in such projects if there is a scope of establishing them.