Though the ministry does not intend to issue any standing instructions to the financial institutions requiring its prior approval, sources said the government's role would depend on a case-to-case basis.

The finance ministry move assumes significance in the wake of reports that ICICI was close to a merger deal with Anagram Finance Ltd. This would be the second acquisition by ICICI after ITC Classic.

The ministry believes that though mergers and takeovers are commercial decisions of FIs, it would like to satisfy itself since most of the NBFCs had huge fund exposures in leased and hire purchase assets. Most of the money invested by these NBFCs has been raised as debt from the market.

Ministrysources said that ICICI is likely to be asked to furnish details of the proposed merger including the assets and liabilities of Anagram, especially in view of its failed negotiations for a takeover by GE Capital and Marubeni.

Anagram's net profit has fallen sharply to Rs 4.5 crore during the first half ended December, 1997, against a net profit of over Rs 34 crore during the year ended June, 1997.

Anagram assets have grown rapidly to Rs 1,370 crore as on June 30, 1997 from Rs 509 crore in June, 1995. The company's fixed deposit collection alone stands at Rs 287 crore with total deposits aggregating to Rs 455 crore.

The company's debt burden on accounts of secured loans (Rs 298 crore) and unsecured loans (Rs 496 crore) stood around Rs 800 crore. The net block of the company stood at only Rs 267 crore. Taking into account the investments at a cost of Rs 129 crore, the total comes to Rs 400 crore which is about 50 per cent of the fund based exposure.

The crucial details, which the ministry is expected toask for, are transactions of Anagram with group companies, associated companies and investment companies, the non-performing assets and analysis of sundry debtors and verification of leased assets, sources said.