IDBI Bank Will Be Sold To Private Firms Next Month; Entire Stake Of LIC Will Be Sold Off
The privatization of the IDBI Bank is all set to begin from next month, as confirmed by new reports coming in.
The Government has a target of Rs. 1.75 lakh for disinvestment and the entire process will be completed in 2021-22.
IDBI Bank’s Divestment To Begin From Next Month; Foreign Investors Also Invited
The Union Cabinet has stated that the privatization of IDBI Bank is all set to happen from next month. As per some Finance Ministry officials, the Union Cabinet will probably be considering a note on the privatization of IDBI Bank which is not a part of the two banks that will put on sale in the next fiscal year.
RBI’s corrective action framework, which set restrictions on the operations of the banks that had exceeded 25 per cent of assets.
As per the officials, the sale of the stake will begin by the end of the next month after the Cabinet gives an approval for the same. Foreign investors have also been welcomed to take management control in the bank.
LIC’s Entire Stake To Be Sold Off?
Additionally, the cabinet will also consider the amount of the stake to be sold by the government and Life Insurance Corporation. As per some sources, Government and LIC will also be selling off their stakes in their bank. The government owns about 45.28 per cent stake in the bank, and LIC, which is the largest promoter, holds 49.24 per cent.
LIC was included when the bank was in trouble and now, the government has reportedly stated that the phase is now over.
A maximum foreign direct investment (FDI) of 74 percent in private banks has been allowed by the government in private banks, whereas, 20 per cent has been permitted in PSU banks under the government approval route.
The managing director and CEO of IDBI Bank, Rakesh Sharma, has stated that the bank would now be working on growing the business of the bank with the focus on profitability and in improving efficiency ratios.
The target set by Finance minister Nirmala Sitharaman for 2020-21 is to raise Rs. 2.1 lakh crore from the privatisation and sale of minority stakes in state-owned companies.