Privatization Of IDBI Bank Can Start From July: Govt Expected To Invite Bids From Private Investors, Bankers
The privatization process of IDBI Bank has begun, as the Union Government plans to invite preliminary tenders by the end of July.
Privatization of IDBI: Government Invites Preliminary Bids
Sources close to the development have confirmed that the Department of Investment and Public Asset Management (DIPAM) is now undertaking roadshows in the United States for the sale of IDBI Bank.
It was also revealed that the sale’s contours will be finalised after additional such investor meetings.
As per the source, “”We may need one more round of discussion with RBI on IDBI strategic sale. The expression of interest (EoI) may be invited by July-end.”
As of now, the government owns 45.48 percent of the bank, while the Life Insurance Corporation owns 49.24 percent.
Aside from that, the official stated that management control of IDBI Bank will be transferred as part of the strategic sale, adding that the amount of stake dilution for both the government and the LIC has yet to be determined.
The Cabinet Committee on Economic Affairs had already provided in-principle approval for strategic disinvestment and management control transfer in IDBI Bank in May 2021.
The IDBI Bank Act has already been amended, and transaction advisors have been hired, thanks to the Finance Act 2021.
IDBI Bank Employees Oppose Privatisation
The Unions noted that the Central Governments move is against the assurance given by the then Finance Minister in both the Houses of the Parliament in 2003 that GoI, at all times, would maintain no less than 51% shareholding in IDBI Bank.
“The Central Government being promoter with 45.48% shareholding the general public have reposed their continued faith in IDBI Bank because of which the deposits in IDBI Bank stood at Rs 2,22,578 crores as on December-end 2021.”
In the event that the bank gets sold to private players, it says that the common man’s hard earned money will be at great risk.
Those sharing this sentiment are All India IDBI Officers’ Association, IDBI Officers’ Organisation, All India IDBI Employees Association, and IDBI Karmachari Sangh.
The Unions recalled the hardship faced by the depositors of the erstwhile Punjab & Maharashtra Co-operative Bank (PMC Bank) and Lakshmi Vilas Bank, and YES Bank in the recent past.
It said that it demands the re-classification of IDBI Bank as a Public Sector Bank with GoI (45.48% stake) and LIC (49.24%) as promoters, and GoI’s shareholding in IDBI Bank to be always “not less than 51%”.