Bank

Government likely to invite EoIs in late July after talks with RBI

Privatization of IDBI Bank: The central government has been considering the privatization of the IDBI bank for some time now and has kept the lender on its list of companies to be sold. The Department of Investment and Public Assets Management (DIPAM) is currently holding roadshows in the United States for the sale of the bank, which is expected to be another milestone in achieving the government’s divestment goals. India. The actual amount of the sale of the government’s stake to IDBI bank will be known once the tour is over, the Center had said earlier in April.

Currently, the government is in the process of organizing roadshows in the United States, an official quoted by PTI said on Friday, June 10. After a few more such investor meetings, he will finalize the outlines of the sale of IDBI Bank’s stake, the official added.

“We may need another round of discussions with RBI on the strategic sale of IDBI. Expression of Interest (EoI) can be invited by the end of July,” the official said. was confirmed earlier by sources that the government may invite EoIs in May to sell its stake in IDBI Bank and expects to complete the divestment process in the current fiscal year 2022-23.

The official said that while the amount of government and LIC stake dilution has yet to be decided, management control of IDBI Bank will be transferred in the strategic sale.

DIPAM secretary Tuhin Kanta Pandey also said in April that EoIs would be invited once meetings with investors were over. “The exit quantum will be known after the roadshow, then the structure of the expression of interest will be finalized. One thing is certain, the management control will pass. direction at what level of equity will have to be decided when we have decided on the structure of the EOI,” Pandey had said in Delhi during an event on the LIC IPO roadshow.

The government holds 45.48% of the bank’s capital, while LIC holds 49.24%. Necessary changes to the IDBI Bank Law have already been made through the Finance Law 2021 and Transaction Advisors have been appointed.

The Cabinet Committee on Economic Affairs had given its approval in principle to the strategic divestment and transfer of management control of IDBI Bank in May last year. “The CCEA has given approval in principle for the strategic divestment as well as the transfer of management control in IDBI Bank Ltd,” a government statement said.

In January 2019, IDBI Bank became a subsidiary of LIC, following the acquisition of 8,27,590,885 additional shares. In December 2020, IDBI Bank was classified as an associated company due to the reduction of the participation of LIC to 49.24%. The IDBI bank’s privatization efforts come at a time when the government has postponed similar plans for Bharat Petroleum.

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