IDBI Bnak
Customers stand outside an IDBI Bank branch in Mumbai | Representational image | Dhiraj Singh | Bloomberg
Text Size:

New Delhi: The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi on Wednesday gave in-principle approval for strategic disinvestment along with transfer of management control in IDBI Bank Ltd.

The extent of respective shareholding to be divested by the government and LIC will be decided at the time of structuring of transaction in consultation with the Reserve Bank of India (RBI), according to an official statement. The government and LIC together own more than 94 per cent of equity of IDBI Bank (45.48 per cent and 49.24 per cent respectively. LIC is currently the promoter of IDBI Bank with management control and the government is co-promoter.

The LIC board has passed a resolution to the effect that the public sector company may reduce its shareholding in IDBI Bank through divesting its stake to relinquish management control and by taking into consideration price, market outlook, statutory stipulation and interest of policy holders.

This decision of LIC’s board is also consistent with the regulatory mandate to it to reduce its stake in the bank.

It is expected that strategic buyer will infuse funds, new technology and best management practices for optimal development of business potential and growth of IDBI Bank and will generate more business without any dependence on LIC and government assistance/funds.

Resources through strategic disinvestment of government equity from the transaction will be used to finance developmental programmes of the government, benefiting the citizens.


Also read: How Modi govt can finally meet its ambitious ‘privatisation’ target


 

Subscribe to our channels on YouTube & Telegram

Why news media is in crisis & How you can fix it

India needs free, fair, non-hyphenated and questioning journalism even more as it faces multiple crises.

But the news media is in a crisis of its own. There have been brutal layoffs and pay-cuts. The best of journalism is shrinking, yielding to crude prime-time spectacle.

ThePrint has the finest young reporters, columnists and editors working for it. Sustaining journalism of this quality needs smart and thinking people like you to pay for it. Whether you live in India or overseas, you can do it here.

Support Our Journalism

VIEW COMMENTS