The government is holding roadshows for IDBI Bank privatisation and will come out with the expression of interest (EoI) after assessing investor interest, Minister of State for Finance Bhagwat Karad said.
The government is holding roadshows for IDBI Bank privatisation and will come out with the expression of interest (EoI) after assessing investor interest, Minister of State for Finance Bhagwat Karad said on Monday.
The Cabinet Committee on Economic Affairs had in May last year given in-principle approval for strategic disinvestment and transfer of management control in IDBI Bank. The government and Life Insurance Corporation (LIC) together own more than 94 percent equity of IDBI Bank. However, the exact quantum of stake dilution is yet to be decided.
The government had said in a statement in May last year that the extent of respective shareholding to be divested by the government of India and LIC shall be decided at the time of structuring of transaction in consultation with Reserve Bank of India.
In a written reply to the Lok Sabha, Karad said it is expected that the strategic buyer will infuse funds, bring new technology and best management practices in IDBI Bank and shall generate more business without dependence on LIC and government for capital.
State-owned LIC, currently having management control, has a 49.24 percent stake, while the government holds 45.48 percent in the bank. Non-promoter shareholding stands at 5.29 percent.
"... roadshows are currently being held to assess the investors' interest before floating the Expression of Interest (EoI)," Karad said.
The minister added that while deciding the terms and conditions of the strategic sale, legitimate concerns of the existing employees and other stakeholders are suitably addressed through appropriate provisions made in the share purchase agreement.
Last month, LIC had said it would like to retain some stake in IDBI Bank so that the insurer continues to reap the benefits of the bancassurance channel.
Bancassurance is an arrangement between a bank and an insurance company allowing the latter to sell its products to the bank's customers and others through the branch network.