Government And LIC Together To Divest 60.72% Stake In IDBI Bank

Government and LIC Together To Divest 60.72% Stake in IDBI Bank: The government requested bids for the privatization of IDBI Bank and said that, along with LIC, the government will sell a total of 60.72% stake in the Industrial Development Bank of India. The Department of Investment and Public Asset Management (DIPAM) said that the potential investor should have a minimum net worth of Rs 22,500 crore, and must report a net profit in three out of the past five years to be eligible for bidding for IDBI Bank.

Key Points of News

•  Investors should have a maximum of four members would be allowed in a consortium.
• LIC holds 49.24% while the Government of India holds 45.48%  in IDBI Bank as on 31st March 2022.
• The financial bids for the sale will be invited by March and the process is expected to conclude by September 2023
• State-owned LIC of India will also be reducing its holding in IDBI Bank as part of the state’s divestment process.
• This would reportedly be the first privatization of a public-sector bank.
• IDBI Bank operates as a full-service universal bank serving customers from all segments.
• The successful bidder would be obliged to lock in at least 40% of the equity capital for a period of five years from the date of purchase.
• The DIPAM stated that the potential investor must have a minimum net worth of 22,500 crores and must have reported net profit in three of the previous five years to be eligible for bidding for IDBI Bank.

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All About IDBI Bank

IDBI Bank is an Indian government-owned financial service company, headquartered in Mumbai. IDBI stands for Industrial Development Bank of India and it was established in 1964 to provide credit and other financial facilities for the development of Indian industry. At present, it is one of the largest commercial banks in India which provides personalized banking and financial solutions.

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