IFCI's chairman and managing director PV Narasimham said Mr Ganguli's resignation has been accepted. He said Mr Ganguli, who was to retire in March 2002, resigned owing to some personal reasons.

Mr Ganguli's exit after 29 years of service at IFCI is being linked to the Basu Committee report, which has pointed out the sharp rise in the level of non-performing assets (NPAs) for five-six years till 1999.

Two general managers, one in Chennai and another in Delhi, have also quit during the last few months. The general manager in Delhi was asked to put in his papers following discovery of irregularities. Another general manager RG Sharma was sacked last year. A top IFCI official said action against one more general manager could be initiated for lapses in his functioning after the inquiry against him is completed.

According to an industry source, the Basu Committee report, which was submitted to the finance minister Yashwant Sinha recently, had taken a strong note on the rising level of NPAs in the financial institution's lending portfolio.

Mr Narasimham, however, said that there was no relation between the NPAs and the resignation of Mr Ganguli.

"The level of NPAs in the last fiscal was about 20.8 per cent, which would remain at the same level by the end of this fiscal," he said.

Mr Ganguli also stated that he had resigned owing to personal reasons. When asked that whether his resignation was necessiated due to the rising level of NPAs, Mr Ganguli said, ``I don't know?''. He added, ``I may join some other company,'' but said he had not taken any decision so far this regard.

Mr Narasimham has initiated an aggressive and bold strategy to cut down the IFCI's NPAs to 20 per cent from 30 per cent by March 2001.

"The NPAs may further come down to 10-12 per cent in the next couple of years," a top IFCI official said.

IFCI has also asked the government for Rs 400 crore towards recapitalisation as suggested by the Basu committee.