NEW DELHI, May 14: ICICI and IFCI will launch their fixed deposit schemes in about two months. Both these FIs come under the ambit of the Companies Act which stipulates under section 58 that advertisements for FDs must be accompanied by the last year's financial results.

While ICICI has announced its results, it is going to take some time to finalise its schemes. IFCI will do so after its results are announced .FIs do not expect to raise a huge amount through the fixed deposit (FD) route. FIs raise short-term liabilities to bridge short asset-liability mismatches for which purpose recourse cannot be taken on FDs. FIs often face 10 to 15 days mismatches for which they raise resources from the market. FIs are allowed to raise resources for a minimum of three months; while they can lend in the inter-bank call market, they are not allowed to borrow from this market.

Asset-liability mismatches are sharper in the case of FIs as repayments for their long term assets is made on a quarterly basis. In the case of banks as almost the entire exposure is towards working capital, daily repayments and draw-outs on the cash-credit limits ensurethere are no wide mismatches.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.