The Union Cabinet on Wednesday gave in-principle approval for strategic disinvestment along with transfer of management control in IDBI Bank in line with the Budget announcement earlier this year.
The central government and LIC together own more than 94% equity of IDBI Bank. LIC, currently the promoter of IDBI Bank with management control, has a 49.2% stake.
The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi approved the strategic sale of IDBI Bank, the government said in a statement on Wednesday.
The extent of respective shareholding to be divested by the central government and LIC shall be decided at the time of structuring of transaction in consultation with the RBI, it said.
Finance Minister Nirmala Sitharaman while presenting the Budget 2021-22 had announced the privatisation of public sector banks (PSBs) as part of a disinvestment drive to garner ₹1.75 lakh crore.
The Centre expects the strategic buyer will infuse funds and new technology for development of the bank’s business potential.
