<p class="title">The Union Cabinet is likely to give its approval soon for selling part of the Centre's stake in public sector IDBI bank to Life Insurance Corporation. The move will fulfill a Budget promise that then Finance Minister Arun Jaitley had made two years ago in 2016-17.</p>.<p class="bodytext">The next big priority of the government on economic front is merger of a few big and small banks in the current fiscal ending March 2019 to help them tide over their non-performing assets. IDBI with a huge NPA is one of them, a source said.</p>.<p class="bodytext">He said in the latest meeting with bankers last week, Finance Minister Piyush Goyal had discussed the issue. State Bank of India Chairman Rajnish Kumar had earlier been asked to give a detailed presentation on the matter.</p>.<p class="bodytext">The government currently holds 81% share in IDBI but wants to bring it down to below 50%. It has been looking to sell its stake for past many months but hardly any buyer has come forward.</p>.<p class="bodytext">LIC has evinced interest in buying 43% in IDBI bank, which has the highest non-performing assets among state-owned lenders. This will take LIC's total stake in IDBI to 51% and also take care of the lender's stressed loan books to a certain extent.</p>.<p class="bodytext">Sources said the insurance regulator – Insurance Regulatory and Development Authority of India (IRDAI) – is expected to tweak LIC's shareholding norms as the state-owned insurer is not allowed to own more than 15% in a public sector bank.</p>.<p class="bodytext">IDBI was earlier put on prompt corrective action (PCA) by the Reserve Bank of India due to mounting bad loans and negative return on assets. Thereafter, it set in motion a host of turnaround steps, including reducing bad loans and maximising recoveries, focussing more on retail loans, cutting down on interest expenses by redeeming high-cost bonds, bringing down operating expenses by closing down unviable ATMs and branches, and monetising non-core assets.</p>.<p class="bodytext">However, its net losses widened to Rs 5,663 crore in March quarter. The bank also reported its highest ever gross NPA ratio at 27.95%, up 323 basis points sequentially.</p>
<p class="title">The Union Cabinet is likely to give its approval soon for selling part of the Centre's stake in public sector IDBI bank to Life Insurance Corporation. The move will fulfill a Budget promise that then Finance Minister Arun Jaitley had made two years ago in 2016-17.</p>.<p class="bodytext">The next big priority of the government on economic front is merger of a few big and small banks in the current fiscal ending March 2019 to help them tide over their non-performing assets. IDBI with a huge NPA is one of them, a source said.</p>.<p class="bodytext">He said in the latest meeting with bankers last week, Finance Minister Piyush Goyal had discussed the issue. State Bank of India Chairman Rajnish Kumar had earlier been asked to give a detailed presentation on the matter.</p>.<p class="bodytext">The government currently holds 81% share in IDBI but wants to bring it down to below 50%. It has been looking to sell its stake for past many months but hardly any buyer has come forward.</p>.<p class="bodytext">LIC has evinced interest in buying 43% in IDBI bank, which has the highest non-performing assets among state-owned lenders. This will take LIC's total stake in IDBI to 51% and also take care of the lender's stressed loan books to a certain extent.</p>.<p class="bodytext">Sources said the insurance regulator – Insurance Regulatory and Development Authority of India (IRDAI) – is expected to tweak LIC's shareholding norms as the state-owned insurer is not allowed to own more than 15% in a public sector bank.</p>.<p class="bodytext">IDBI was earlier put on prompt corrective action (PCA) by the Reserve Bank of India due to mounting bad loans and negative return on assets. Thereafter, it set in motion a host of turnaround steps, including reducing bad loans and maximising recoveries, focussing more on retail loans, cutting down on interest expenses by redeeming high-cost bonds, bringing down operating expenses by closing down unviable ATMs and branches, and monetising non-core assets.</p>.<p class="bodytext">However, its net losses widened to Rs 5,663 crore in March quarter. The bank also reported its highest ever gross NPA ratio at 27.95%, up 323 basis points sequentially.</p>
