Privatization of the bank: LIC is currently the bank’s promoter. In a FICCI event, Tuhin Kant Pandey stated that this is something on which we have been working for a while. In a first-of-its-kind deal, a bank will be privatized through competitive bidding.
Bank Privatization: The national government is moving quickly to privatize a different sizable bank. Tuhin Kant Pandey, the secretary of DIPAM, stated that the department is working on the letter of intent (EOI). The privatization of IDBI Bank will soon be open for investor bids. The strategic disinvestment and transfer of management control of IDBI Bank received in-principle approval from the Cabinet Committee on Economic Affairs in May 2021.
Currently, the government owns 45.48 percent of the bank, while Life Insurance Corporation (LIC) owns 49.24 percent. LIC is currently the bank’s promoter as well. We have been working on this for a while, Tuhin Kant Pandey stated in “FICCI Capum-2022 19th Annual Capital Markets Conference.” We will also be privatizing a bank through a competitive bidding process for the first time in this deal. 94% of the shares in IDBI Bank are jointly owned by the government and LIC.
Letter of Intent to be issued soon
After nearly four years of better financial performance, the bank has exited the PCA framework, according to the DIPAM Secretary. A significant event occurred in March 2021 when, due to IDBI Bank’s improved financial performance during the previous nearly four years, the RBI removed it from the rapid corrective action framework. “We are working on the letter of intent (EOI) and it will be issued soon,” said the secretary of the Department of Investment and Public Asset Management (DIPAM).
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Significantly, the government has set a goal of generating Rs. 65,000 crores from disinvestment in 2022–2023 (April-March). The government has already raised Rs. 24,544 crores, the majority of which came through the listing of the nation’s largest insurance business, LIC, in May of this year.
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