Cabinet Approves Strategic Disinvestment & Transfer of Management Control in IDBI Bank

NEW DELHI: The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri 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 GoI and LIC shall be decided at the time of structuring of the transaction in consultation with RBI.

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

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 Govt. 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 LICs Board is also consistent with the regulatory mandate to it reduce its stake in the Bank.

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/funds. Read more

Resources through strategic disinvestment of Govt. equity from the transaction would be used to finance developmental programmes of the Government benefiting the citizens.

Industrial Development Bank of India was established in 1964 by an act to provide credit and other financial facilities for the development of the fledgling Indian industry. It is a development finance institution and a subsidiary of Life Insurance Corporation.