LIC can reduce its stake in IDBI Bank Limited through disinvestment
New Delhi. The Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Narendra Modi has approved the transfer of strategic disinvestment and management at IDBI Bank Limited on Wednesday.
During the budget speech in February, Finance Minister Nirmala Sitharaman spoke about the disinvestment of IDBI Bank. At present, IDBI Bank is controlled by the Life Insurance Corporation of India (LIC). The Government of India is in the role of a promoter. LIC will decide how much stake will be sold in IDBI Bank by the government in consultation with the Reserve Bank of India (RBI) at the time of structuring the transaction. Government of India holds 45.48 per cent share in IDBI (Industrial Development Bank of India), while LIC holds 49.24 per cent. Now CCEA gave in-principle approval on Wednesday.
LIC’s board passes resolution
LIC’s board has passed a resolution that LIC can reduce its stake in IDBI Bank Ltd through disinvestment. Also, the government can sell its stake through strategic disinvestment. Through this disinvestment, it is expected that the bank will have new funds, technology and management, which will also accelerate the growth of IDBI Bank.
Without the help of the government and LIC, the bank and business will be able to journal. The money coming through the strategic disinvestment of government stake will be used to finance developmental programs. Meanwhile, the bank has earned a profit of 512 crores in the March quarter. Once in this quarter, the bank earned Rs 135 crore.