Strategic divestment of IDBI Bank receives CCEA nod

06 May 2021 CW Team

The long-pending strategic divestment of IDBI Bank received approval from the Cabinet Committee on Economic Affairs (CCEA) on May 5.

As per an official statement, the extent of 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 central government and LIC, jointly own over 94% of the equity of IDBI Bank, with the Centre having 45.48% equity, and LIC with 49.24%. LIC is currently the promoter of IDBI Bank with the management control system, with the Government of India as its co-promoter.

A high ranking government official has said that LIC and the Centre will separate the substantial stake after meeting with the RBI. The process of selling the major stake in the bank to a private consumer will also be decided after the meeting. A year when the government is using the term privatisation, the official statement made on CCEA clearance used the previous term strategic disinvestment. This strategic development even includes a sale to other state-owned entities.

LIC had completed the acquisition of controlling the stake in IDBI in January 2019, making IDBI the bank's majority shareholder. After this, RBI stated that IDBI stands re-categorised as a private bank.

The statement of CCEA said that LIC's Board members have passed a resolution that LIC may reduce the shareholding in IDBI bank by divesting its stake together with a strategic stake sale in the vision of the government to relinquish the management control and taking into consideration price, market outlook, statutory stipulation, and interest of the policyholders.

For the year 2021-2022, the Centre has targeted the divestment of $40 billion on the back of the privatisation of Air India, Bharat Petroleum, Shipping Corp, Concor, two state-owned banks and the initial public offerings of the LIC.

A major part of the stake was sold to LIC, but an eventual sale to a private sector has been on the cards.

Image Source

Also read: Union Cabinet clears new divestment policy

Also read: What is strategic about disinvestment?

The long-pending strategic divestment of IDBI Bank received approval from the Cabinet Committee on Economic Affairs (CCEA) on May 5. As per an official statement, the extent of 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 central government and LIC, jointly own over 94% of the equity of IDBI Bank, with the Centre having 45.48% equity, and LIC with 49.24%. LIC is currently the promoter of IDBI Bank with the management control system, with the Government of India as its co-promoter. A high ranking government official has said that LIC and the Centre will separate the substantial stake after meeting with the RBI. The process of selling the major stake in the bank to a private consumer will also be decided after the meeting. A year when the government is using the term privatisation, the official statement made on CCEA clearance used the previous term strategic disinvestment. This strategic development even includes a sale to other state-owned entities. LIC had completed the acquisition of controlling the stake in IDBI in January 2019, making IDBI the bank's majority shareholder. After this, RBI stated that IDBI stands re-categorised as a private bank. The statement of CCEA said that LIC's Board members have passed a resolution that LIC may reduce the shareholding in IDBI bank by divesting its stake together with a strategic stake sale in the vision of the government to relinquish the management control and taking into consideration price, market outlook, statutory stipulation, and interest of the policyholders. For the year 2021-2022, the Centre has targeted the divestment of $40 billion on the back of the privatisation of Air India, Bharat Petroleum, Shipping Corp, Concor, two state-owned banks and the initial public offerings of the LIC. A major part of the stake was sold to LIC, but an eventual sale to a private sector has been on the cards. Image SourceAlso read: Union Cabinet clears new divestment policyAlso read: What is strategic about disinvestment?

Building Material

11 Dec 2025

Suraj Estate Wins Euromoney Award for India’s Best Residential Developer

"Suraj Estate Developers Limited has received the Euromoney Real Estate Award 2025 for ‘India’s Best Residential Developer’, positioning the company among globally benchmarked leaders in the sector. The recognition reflects its four-decade legacy in delivering high-quality residential and redevelopment-led projects across South Central Mumbai. The Euromoney Real Estate Awards, presented by the London-based Euromoney magazine, are widely regarded as one of the most credible global assessments of performance in real estate, banking and finance. Winners are selected through surveys of inte..

Building Material

11 Dec 2025

Lloyds Metals, Tata Steel Sign MoU to Explore Strategic Collaboration

"Lloyds Metals and Energy Limited has signed a non-binding Memorandum of Understanding with Tata Steel Limited to evaluate potential areas of strategic cooperation across mining, logistics, pelletisation and steelmaking. The MoU was signed by B Prabhakaran, Managing Director of Lloyds Metals, and Mr T V Narendran, CEO and Managing Director of Tata Steel. The partnership framework aims to leverage the natural operational synergies between both companies and assess opportunities in greenfield steel projects, iron ore mining, slurry pipeline infrastructure, pellet manufacturing in iron ore–ric..

Building Material

11 Dec 2025

IndiaAI, Gujarat Govt Host Regional Conclave Ahead of 2026 AI Summit

The IndiaAI Mission under the Ministry of Electronics and Information Technology, along with the Government of Gujarat and IIT Gandhinagar, convened a Regional Pre-Summit Event at Mahatma Mandir, Gandhinagar. The initiative is part of the build-up to the India–AI Impact Summit 2026, scheduled for 15–20 February 2026 at Bharat Mandapam, New Delhi. The conclave brought together senior policymakers, technology leaders, researchers and industry practitioners to examine how AI can accelerate economic, digital and social transformation across sectors. The programme focused on the overarching th..