The institution has set a target of 20 per cent growth during the full year in both sanctions and disbursements.

While the target for sanctions has been set at Rs 13,000 crore for the full year, disbursements has been fixed at Rs 7,000 crore.

Addressing the shareholders at its annual general meeting here today, IFCI chairman and managing director PV Narasimham said last year the institution had disbursed Rs 5,650 crore and sanctioned Rs 10,983 crore to 303 projects.

"Despite the recessionary trend in the economy, IFCI operations were not affected during 1997-98 as well as during the current year," he said.

On the resource mobilisation in the first half, IFCI chief said the corporation has already mobilised Rs 1,700 crore at an average cost of 13.41per cent besides raising Rs 214 crore by way of preferential capital at a coupon rate of 10.75 per cent.

He said IFCI also planned to come out with a public issue of bonds in one or two tranches in addition to assessing the traditional private placement market. Apart from this, the FI planned to raise $150 million from overseas market. Narasimham said IFCI's non-performing assets (NPAs) stood at 13.62 per cent, which was the highest among the financial institutions. "IFCI recognises the need to reduce NPAs and has set a target of reducing them to 5-6 per cent in the next two to three years," he said.

He welcomed the government proposal to form asset reconstruction fund for reduction of NPAs alongwith changes in administrative and legal set up for expediting settlement in Board for Industrial and Financial Reconstruction (BIFR) as well as debt recovery tribunal.

On lending to the steel sector, the chairman said it had exposure of about Rs 2,740 crore in the sector, 15 per cent of its total funding of Rs18,124 crore.

He said the downtrend in the steel sector was due to a excess capacity in the Asian countries along with a fall in international prices, which have dropped from $240-250 a tonne to $220 per tonne.

Narasimham said the sector would revive in the next few years and the government and the financial institutions have already initiated steps to face the challenge posed by international downtrend.

The AGM also approved the appointments of rotational directors on IFCI board with N Shankar and Amit Mitra being reappointed, while Ramesh Mishra, CMD of Dena Bank was inducted into the board in place of Rashid Jilani, CMD Punjab National Bank.