New Delhi: After taking a long-awaited decision to reform-bailout package of beleagured Unit Trust of India (UTI) on August 31, the government would finalise a similar package for ailing Industrial Finance Corporation of India (IFCI) next week.

"We have decided to deal with UTI, IFCI and IDBI one by one and IFCI is next which would be taken up by Cabinet Committee on Economic Affairs next week," Finance Minister Jaswant Singh told reporters on August 31 after announcing the CCEA decision on UTI.

The financial institution has been facing serious asset-liability mismatch with credit rating agencies branding the financial institution as below investment grade.

It has huge non-performing assets at 21 per cent, which worked out to around Rs 4,000 crore.

Because of the poor health of its finances, IFCI recently defaulted in external payment of $ 100 million besides interest payment of Rs 300 crore to the trustees of employees provident fund (EPF), which has parked some of its investments in the financial institution.

As a result of difficult financial situation, the financial institution has not been able to carry out core business of lending.

Recently, international financial consultancy firm Mckinsey had recommended splitting of IFCI into two companies, good and bad IFCI along the lines of dividing UTI into two parts.

PTI