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
Infrastructure Urban

NABARD Holds Seminar on Vigilance, Integrity and Good Governance

National Bank for Agriculture and Rural Development (NABARD) organised a seminar on “Vigilance: Strengthening Integrity and Good Governance” on 25 August 2026 at its Head Office in Mumbai as part of the ongoing Vigilance Awareness Campaign 2026 being observed from 17 August to 16 November 2026, with the theme “Probity for Prosperity."" The seminar was graced by Suresh N Patel, Former Central Vigilance Commissioner, Government of India, as the chief guest and keynote speaker.  The programme was attended by G S Rawat, Deputy Managing Director, Dr Ajay K Sood, Deputy Managing Dire..

Next Story
Equipment

XCMG Unveils World's First 14,000-Ton Ring Crane for Heavy Lifting

XCMG has announced that the first main unit of the world's first 14,000-ton ring crane has rolled off the production line, marking a historic breakthrough in ultra-heavy lifting technology. Jointly developed by XCMG and Sinopec Heavy Lifting & Transportation Co., Ltd., the crane will be the largest-capacity ring crane ever built, setting a new benchmark for major construction projects worldwide.The crane features a modular configuration comprising two main units that work in tandem. The first main unit has completed final assembly and can independently perform lifting operations. Once both..

Next Story
Infrastructure Urban

Thriveni Logistics orders 200 tip trailers from Jagdamba trailers

Jagdamba Trailers (JTPL), one of India’s growing trailer manufacturers, has secured a significant order for 200 Tip Trailers from Thriveni Transport and Logistics Pvt. Ltd., a leading mining and logistics company serving operations across India and overseas.The order, placed for iron ore transportation, is a major milestone for JTPL, particularly as the company secured the business after competing with more than 10 established trailer manufacturers. It also strengthens an already successful relationship between the two companies. Approximately one and a half years ago, Thriveni Transport and..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code