New Delhi [India], May 5 (ANI): The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi on Wednesday gave in-principle approval for strategic disinvestment along with transfer of management control in IDBI Bank Ltd.
The extent of respective shareholding to be divested by the government and LIC will be decided at the time of structuring of transaction in consultation with the Reserve Bank of India (RBI), according to an official statement.
The government and LIC together own more than 94 per cent of equity of IDBI Bank (45.48 per cent and 49.24 per cent respectively. LIC is currently the promoter of IDBI Bank with management control and the government is co-promoter.
The LIC board has passed a resolution to the effect that the public sector company may reduce its shareholding in IDBI Bank through divesting its stake to relinquish management control and by taking into consideration price, market outlook, statutory stipulation and interest of policy holders.
This decision of LIC's board is also consistent with the regulatory mandate to it to reduce its stake in the bank.
It is expected that strategic buyer will infuse funds, new technology and best management practices for optimal development of business potential and growth of IDBI Bank and will generate more business without any dependence on LIC and government assistance/funds.
Resources through strategic disinvestment of government equity from the transaction will be used to finance developmental programmes of the government, benefiting the citizens. (ANI)