The government is about to sell its stake in IDBI Bank. Government of India and LIC hold more than 94 per cent stake in IDBI Bank.
The Union Cabinet chaired by Prime Minister Narendra Modi has approved strategic disinvestment and transfer of management in IDBI Bank Limited. This approval has been received at a time when the bank has made profit after about 5 years.
What the government has decided: In fact, the government is about to sell its stake in public sector IDBI Bank. Government of India and LIC hold more than 94 per cent stake in IDBI Bank (Government of India 45.48%, LIC 49.24%). LIC is currently the promoter of IDBI Bank with management control and is a co-promoter of the Government of India. However, the decision of how much stake in IDBI Bank will be sold by the government will be taken only after consultation with LIC, Reserve Bank of India.
LIC took this decision: Meanwhile, the Board of LIC has passed a resolution that LIC may reduce its stake in IDBI Bank Limited through disinvestment. After this, LIC will have to relinquish management control or transfer. Along with this, LIC will also have to take into consideration the price, market outlook, statutory conditions and interests of the policy holders during this period.
It is expected that buyers will invest money in the bank to increase the business capacity of IDBI Bank and for its growth. For this, we will take help of new technology and best management systems. The proceeds through strategic disinvestment of government stake will be used to finance developmental programs.
Bank is in profit: IDBI Bank released its quarterly results in the past. The bank had reported that the profits have been made in the financial year ended March 2021 after about five years. The bank made a profit of Rs 1,359 crore in the financial year 2020-21. Earlier, the bank had a loss of Rs 12,887 crore in 2019-20. According to IDBI Bank, the bank has made profits after five years.
Government has to raise so much money: Tell you that the government has to raise a total of Rs 1.75 lakh crore from disinvestment in the financial year 2021-22. The government is selling its stake in several important companies or sectors, including Air India, BPCL. Apart from this, LIC also plans to raise funds through an IPO.
