Prime Minister Shri Narendra Modi's Cabinet Committee on Economic Affairs has given its in-principle approval for strategic disinvestment and management control transfer in IDBI Bank Ltd.
The number of respective shareholdings to be divested by the Government of India and the Life Insurance Corporation of India (LIC) will be determined at the time of transaction structuring in consultation with RBI.
The Government of India (GoI) and the Life Insurance Corporation of India (LIC) jointly own more than 94 percent of IDBI Bank's equity (GoI 45.48 percent, LIC 49.24 percent ). IDBI Bank with Management Control is currently promoted by LIC, with the Government of India as a co-promoter.
The LIC Board of Directors has passed a resolution stating that the LIC may reduce its stake in IDBI Bank Ltd. by divesting its stake in conjunction with a strategic stake sale proposed by the government with the goal of relinquishing management control and taking into account price, market outlook, statutory requirements, and policyholder interests.
The LIC Board's decision is also in line with its regulatory requirement to reduce its interest in the Bank.
The strategic buyer is expected to inject capital, new technologies, and best management practises for the optimal development of IDBI Bank Ltd.'s business potential and growth, and to generate more business without relying on LIC or government assistance/funds.
Resources from the transaction's strategic disinvestment of government equity would be used to fund the government's development programmes that support people.