In a strategic divestment exercise, the Cabinet is mulling shedding its 45.5 per cent stake in debt-laden lender IDBI Bank, a source told Business Standard.
Before giving the Department of Investment and Public Asset Management (DIPAM) the go-ahead, the Cabinet’s approval is required as banks come under the Department of Financial Services (DFS), a senior government official told the publication. The strategy for divestment will also be decided by DIPAM only after this approval is given.
“After the Cabinet’s approval, intermediaries can be appointed,” the official is quoted as saying.
DH couldn't independently verify the report.
The initial plan of the government was to sell its stake in the lender last year to private and retail investors but the Covid-19 pandemic disrupted it. This is why the government is taking it up this year.
“Although the process should have moved faster, we will be able to close the transaction this financial year,” said the official added.
Consultations will be held with LIC, another major stakeholder in the lender with a 49.2 per cent stake. The government, through LIC, holds 94.7 per cent stake in IDBI Bank. It is possible that the national insurer will also sell all of its stake, to allow new buyers to own a majority share of the bank.
Published 13 April 2021, 11:25 IST