The Modi government at the Center is preparing to sell its entire stake in the bank soon. It has received cabinet approval last week. Now, in 3-4 weeks, a transaction advisor appointment can be made. After this there will be many changes in the bank.
Corona has had an impact on the common man as well as the treasury of the government. That is why the government is raising money by selling stakes in companies and banks. Meanwhile, news has come that the exercise of selling shares in IDBI Bank has intensified. According to media reports, the disinvestment department of the government will issue RFP i.e. Request For Proposal for the next 3-4 weeks for the sale. It will be issued to appoint RFP Transaction Advisor. Let us tell you that the Central Cabinet had approved the strategic disinvestment of IDBI Bank last week. After this there will be many changes in the bank.
Right now the government and LIC have a big stake
The Government of India holds 45.48 per cent stake in IDBI Bank and 49.24 per cent stake in LIC. In such a situation, the government has more than 94 percent stake in IDBI Bank, both directly and indirectly. Both the government and LIC will sell stakes.
Let us tell you that IDBI was a government bank, which was formed in the country in 1964. In June 2018, LIC had bought 51 per cent stake in IDBI by investing Rs 21,000 crore. After this, LIC and the government together gave Rs 9,300 crore to IDBI Bank.
What is going to happen now?
According to the news of Indian Express, after the appointment of Transaction Advisor, the part will be roadshow for sale. So that big investors can be attracted.
How will this change in IDBI Bank
It is expected that whoever buys the bank will invest money in the bank for increasing the business capacity of IDBI Bank and for its growth.
Also, the best management process will be adopted so that the business potential of IDBI Bank can be optimally utilized, to ensure its growth.
Apart from this, the new buyer could operate IDBI Bank without the help of the government or LIC. The government will get the money from this strategic disinvestment, it will use it in civil welfare.
Story of idbi bank
If you look at the history of this bank, it started in 1960 but then it was called Development Financial Institution.
The government passed the Industrial Development Bank of India Act, 1964 to create IDBI Bank from DFI. Under this, DFI was converted into IDBI Bank on 1 July 1964.
Under the Companies Act, 1956, IDBI Bank was declared a Public Finance Institution by the government.
IDBI Bank continued to operate as a financial institution until 2004. But in 2004 it was completely transformed into a bank.
IDBI has been given the status of a bank to accelerate business operations in the country. The Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003 was brought and the IDBI Act, 1964 was repealed to be converted from a financial institution to a bank.