News Edition 24 Desk:
Delhi:The Union Government on Wednesday approved strategic disinvestment and transfer of management control in IDBI Bank Limited. The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has given its 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 GoI and LIC shall be decided at the time of structuring of transaction in consultation with the RBI, said an official statement.
The Government of India (GoI) and the LIC together own more than 94 percent of the equity of IDBI Bank, with the Centre holding 45.4 percent and the LIC owning 49.24 percent stake. LIC is currently the promoter of IDBI Bank with management control and the Centre is the co-promoter.
LIC’s Board has passed a resolution to the effect that it 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 LIC’s board is also consistent with the regulatory mandate it to reduce its stake in the bank.
The statement said that it is expected that strategic buyers 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 or funds.