indiamarkets: The concept of an Equipment Bank has been talked by many companies including SREI for some time now. Yet we notice that nothing has materialised. What are the reasons for this?
Kanoria: There is no road block as such. We took the mandate for starting the Equipment Bank only in July 1999. The pilot project is already underway since April last. We have got a full report done by the Boston Consulting Group. We are going about implementing it in a structured fashion because we realise the immense potential the Bank has. If done in a haphazard manner it might lead to a dead end. We are on the right track and by April 2001 the Bank will be running full fledged.

indiamarkets: Are there any hindrances from the government in terms of policy and regulatory issues?
Kanoria: No, there are no hindrances from the government side. When you look at the Information Technology (IT) sector, we notice that it relied less on the government. That was one of the reasons why the sector boomed. If one has to hold the government’s apron then we will not get anywhere. Yes, if some fiscal benefits are provided to the Equipment Bank, then it will facilitate and put it on a faster track. Even otherwise the Equipment Bank is here to stay because there is a need for it

indiamarkets: In you key note address you mentioned that the main financial institutions are not looking at the construction sector, why is that?
Kanoria: The Construction Industry, unfortunately has been in the unorganised sector, so people have always felt that there is no balance sheet. The traditional financial institutions are used to financing on balance sheets and not on cash flow. When we started our company in 1990, we provided financing based on cash flows and not on balance sheet. Hence, it was irrelevant to us whether the balance sheet was good or not.

indiamarkets: How do you foresee the usage of IT in easing the operations of construction equipment bank?
Kanoria: IT is an enabler. E-commerce is not a goal on its own, it’s a role. The role of e-commerce is to ensure the Equipment Bank works well. Using IT, the entire faciltation of services of the Equipment Bank will be faster. We also have an IT strategy in place wherein people are able to deposit their equipment on our site and are also able to place requests for equipment through the web.

The interviewer can be contacted at shanth@indiamarkets.com