The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has given its in-principal approval for strategic disinvestment along with the transfer of management control in IDBI Bank Ltd on Wednesday.
“The extent of respective shareholding to be divested by GoI and LIC shall be decided at the time of structuring of transaction in consultation with Reserve Bank of India,” said the government in a statement.
To be sure, LIC Board had earlier approved stake dilution, relinquishing of management control in IDBI Bank.
The government of India (GoI) and LIC together own more than 94% of the equity of IDBI Bank (GoI 45.48%, LIC 49.24%). LIC is currently the promoter of IDBI Bank with Management Control and GoI is the co-promoter.
LIC’s Board has passed a resolution to the effect that LIC may reduce its shareholding in IDBI Bank through divesting its stake along with strategic stake sale envisaged by the government with an intent to relinquish management control and by taking into consideration price, market outlook, statutory stipulation and interest of policyholders.
This decision of LIC’s Board is also consistent with the regulatory mandate to it to reduce its stake in the Bank.
Surjitt Sahaniidbi
