+
Strategic divestment of IDBI Bank receives CCEA nod
ECONOMY & POLICY

Strategic divestment of IDBI Bank receives CCEA nod

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?

Related Stories

Gold Stories

Next Story
Real Estate

Peninsula Land launches 19 luxury villas in Pune

Pune’s residential landscape is witnessing a shift as premium homebuyers increasingly seek larger spaces, privacy and independent living options beyond high-rise apartments. Addressing this demand, Peninsula Land Limited, part of the Ashok Piramal Group, has launched AshokVillas, an exclusive collection of 19 premium furnished villas in Gahunje, Pune.The development combines the independence of a standalone home with the convenience and security of a managed residential community. Designed around low-density horizontal living, AshokVillas offers residents private spaces while providing acces..

Next Story
Infrastructure Urban

MyBranch Expands South India Network with 16 Workspace Centres

MyBranch has expanded its South India presence with a 50,000 sq ft flexible workspace network comprising 16 centres across 14 cities in Andhra Pradesh, Karnataka, Tamil Nadu and Telangana.The expansion reflects growing demand for flexible office infrastructure as businesses establish regional teams, satellite offices and operations beyond traditional metropolitan markets. MyBranch’s network spans Bengaluru, Coimbatore, Guntur, Hanamkonda, Hubballi, Hyderabad, Madurai, Mangaluru, Rajahmundry, Salem, Tirupati, Vellore, Vijayawada and Visakhapatnam, with a large office space in Chennai also und..

Next Story
Building Material

Walplast Launches Moisture-Resistant Gypsum Plaster Solutions

Walplast Products Pvt. Ltd. has expanded its HomeSure GypEx portfolio with the launch of GypEx MoistShield and GypEx Gold, two gypsum plaster solutions designed to address moisture-prone applications and improve plastering efficiency.The new products have been developed in response to the growing demand for faster construction processes, improved material performance and consistent surface quality. The solutions aim to simplify interior plastering while addressing specific application requirements across construction environments.“Through HomeSure GypEx MoistShield and GypEx Gold, we are exp..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code