The consultant's report will be ready in two months and will also look into computerisation of the asset-liability management system, according to IDBI executive director TM Nagarajan.

Nagarajan who was here in connection with the launch of IDBI Flexibond VI series, said the review to establish a computerised asset-liability management system is part of the strategic thinking in the bank to raise resources with short-term duration of one to two years in the near future.

IDBI feels that it has to be prepared to meet the challenges of universal banking earlier than the time frame of five years projected by the committee set up by the Reserve Bank of India under the chairmanship of SH Khan, the former chairman of IDBI. Bonds have an average cost of 14.5 per cent andunless this is brought down to 13 per cent, financial institutions like IDBI will find it difficult to increase their exposure. The FIs will have to think of various strategies including lending short-term for survival, Nagarajan said.

The new system, when put in place, will help the bank to borrow short and lend long. It will cover the entire gamut of asset-liability management including a GAP analysis and duration analysis, as long-term lending involves more risks. An internal committee at IDBI is discussing the whole issue, he said.

On competition among FIs for project financing, Nagarajan feels that competition among FIs is virtually dead. FIs are now compelled to adopt either a consortium approach to project financing or be a part of a syndicate for such lending. This way they can spread the risk among the participants and no one lender will run the risk of huge losses on projects becoming NPAs. IDBI for now continues with a strong focus on infrastructure segment, especially financing of the powersector. Nagarajan disclosed that this fiscal IDBI will be lending over Rs 7,000 crore and of this nearly 35 to 40 per cent will be for the infrastructure segment.