The Department of Biotechnology (DBT) will soon establish an agency to recover the loans which the DBT had dispersed to several biotech companies during the last more than couple of years under its Small Business Innovation Research Initiative (SBIRI) scheme. SBIRI has so far provided financial assistance (grants-in-aid and loan) to 56 projects of different biotech companies to support small and medium enterprises for proof-of-concept research and development of innovative research leading towards commercialization.

Named as 'SBIRI Loan Recovery Agency (SLRA)', the agency will have to draw up a plan of action and schedule for recovery of dues for each case immediately after assignment of job by DBT; to establish an IT enabled system to maintain accounts; to set up an online system for automated advance notices to the companies for dues; and also have to effect recovery of loan or dues from the entities funded by SBIRI within the specified due dates.

The agency will be responsible to ensure timely receipt of repayments and to take such steps as necessary to recover dues of loan instalments and interest that have become payable as per payment schedule prescribed in individual cases. It also has to keep a close watch on delinquent cases, analyze the cases for delinquency and suggest future course of action; to suggest restructuring solutions, if necessary, including specific action plan along with financial and legal methodology; to oversee legal action if any, to be taken in cases of default and initiate timely action in respect of all claims and co-ordinate all the activities with the legal counsel on each case; and to assess and advice exit options in case of non-recoverable dues.

The DBT will assign all approved projects to SLRA on its technical closure, or foreclosure/termination at any stage during implementation. The DBT has already provided about Rs 5800 lakh of loan so far in various projects and it is expected to provide around Rs 2000 lakh in the year 2009-2010, Rs 500 lakh in 2010-2011 and Rs 120 lakh in 2011-2012 in the ongoing projects. New projects will be addition to it. The DBT plans to extend loan of around Rs 15 to 20 crore annually to various companies for implementation of new projects.

As on date the expected amount for recovery for the next three years is Rs 250 lakh by the end of 2009-2010, Rs 550 lakh in 2010-2011 and Rs 750 lakh in 2011-2012.

The DBT has invited proposals from agencies, organizations, financial institutions or banks to function as the SLRA from 2010 onwards.