PSU Watch logo

| Getting finance has become difficult in coal sector: Coal India CMD Pramod Agrawal |   | Coal India’s first ever CBM extraction project gets off the blocks |   | Amid raising demand, Railways approves operation of 660 more trains |   | Centrum Financial, BharatPe set to take over PMC Bank |  

Cabinet approves strategic disinvestment & transfer of management control in IDBI Bank

The CCEA, chaired by Prime Minister Narendra Modi, has given its in-principle approval for the strategic disinvestment, along with transfer of management control, of IDBI Bank Ltd

Cabinet approves strategic disinvestment & transfer of management control in IDBI Bank
Cabinet approves strategic disinvestment & transfer of management control in IDBI Bank
  • IDBI Bank Ltd to be fully disinvested along with transfer of management control

  • Govt and LIC together own more than 94 percent of the equity of IDBI Bank (GoI 45.48%, LIC 49.24%)

  • "The strategic buyer will infuse funds, new technology and best management practices for optimal development of business potential and growth of IDBI Bank Ltd"- Govt

New Delhi: The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has given its in-principle approval for the strategic disinvestment along with the transfer of management control in IDBI Bank Ltd. The extent of the respective shareholding to be divested by the government and Life Insurance Corporation (LIC) shall be decided at the time of structuring of transaction in consultation with the Reserve Bank of India (RBI).

The government of India (GoI) and LIC together own more than 94 percent of the equity in IDBI Bank (GoI 45.48%, LIC 49.24%). LIC is currently the promoter of IDBI Bank with management control and the government is the co-promoter.

LIC’s Board has passed a resolution to the effect that LIC may reduce its shareholding in IDBI Bank Ltd. through divesting its stake along with strategic stake sale envisaged by the government with an intent to relinquish management control and by taking into consideration price, market outlook, statutory stipulation and interest of policyholders. This decision of the LIC Board is also consistent with the regulatory mandate to reduce its stake in the bank.

ALSO READ:

1. COVID: Bidders seek extensions in deadlines, BPCL, Air India disinvestment likely to get delayed

2. BPCL flags off first parcel of Normal Butanol from Kochi Refinery petrochemical complex

It is expected that the strategic buyer will infuse funds, new technology and best management practices for optimal development of business potential and growth of IDBI Bank Ltd and shall generate more business without any dependence on LIC and government assistance and funds. Resources through strategic disinvestment of government equity from the transaction would be used to finance developmental programmes of the government, benefiting the citizens.

(PSU Watch- India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram & Twitter as well. Join PSU Watch Channel in your Telegram and follow us on Twitter to stay updated)