Apart from Mr Desai, IDBI chairman GP Gupta, IIBI chairman and managing director Dr Basudeb Sen and IFCI chairman PV Narasimham came here to participate in a conclave of chief of financial institutions on `Indian Industry in Transition: Towards Competitiveness' organised by the Indian Chamber of Commerce.

It is likely that the government will finally clear the proposal for privatisation of the Exim Bank, Mr Desai said. However, the privatisation will call for change in the bank's Act which has to be ratified by Parliament.

Since the government is no more providing budgetory support to the Exim Bank, privatisation has become necessary for the survival of the bank now engaged in providing financial support to the exporters and importers. With the privatisation, the government's stake in the bank will go down to 33 per cent as would be the case with other public sector banks. It will also pave the way for universal banking, which is very much on the agenda of the bank.

Speaking at the conclave, Mr GP Gupta suggested that the industry must have to gain the confidence of the financial institutions for loans in view of difficult capital market. In order to do so, promoters must take up projects within their capacity and there should be no diversion of funds from one company to other or from one project to other.

Rather, the IDBI chairman suggested, "find solutions for projects which are not doing well. If you do not look to the problems, lending for new projects will be difficult."

Mr Basudeb Sen believes that credibility is established based on transparency, timely and adequacy of disclosures and added that the corporate houses has to struggle for transition from past reputation to earning credibility. "There is hardly anything known to management that cannot be given to board of directors, shareholders and lenders," he stressed.

The IIBI CMD also suggested that the companies should take the path of transition from controlled funds from public sector banks and FIs to greater freedom and raising funds at competitive cost and the key to success in this transition is to establish credible future cash flows.

Mr PV Narashimham stressed the need for restructuring to make the Indian industry internationally-competitive. "If we delay restructuring for two years, there would be nothing left for restructuring," he said. He further cautioned the industry saying, "don't expect sacrifice from the other side."

ICC president Mr CK Dhanuka said that under the present system, the job of appraising a project and forming opinion by a FI is duplicated by by other members of the consortium and hence has become very time consuming. Hence, he suggested that FIs could look into a centralised system of apprisal to avoid delays.

Later, Mr Gupta told reporters that mechanism for corporate restructuring will be offered in the next two to three months.