Finance

IDBI privatisation: Govt likely to include corporate houses in IDBI privatisation process

The government is likely to include corporate houses in the privatization process and ask the Reserve Bank of India ,RBI) to extend the time frame for the reduction of stake to 26 per cent for the new owners.

However, the RBI has maintained silence on the decision to allow industrial houses to run banks after an internal working group gave its go ahead.

A Times of India report, referring to government sources, said that a consortium of bidders will address concerns of the RBI including concentration of ownership in a few hands.

The government is yet to discuss several issues concerning the potential buyers and is working on it. The framework being created by the government for IDBI’s privatisation might be used for the privatisation of two other nationalized banks- a decision that was announced in 2021- reported TOI.

The Department of Investment and Public Asset Management (DIPAM) has already started organizing roadshows including presentations to the financial world and investors that show the bank’s offering. The

Bank sale plan has been in the pipeline for a while now.

Currently,

is the largest shareholder in the bank with 49.24% stake followed by the government holding 45.48% stake. The government may choose to sell its entire stake in the bank in one go or it could decide to sell portions of its shares over a period of time, depending on how its new investors respond.

DIPAM Secretary Tuhin Kanta Pandey said, “The quantum of exit will be known post roadshow and then the structure of EoI will be finalised. One thing is very sure that management control will be passed on. Currently, it is with LIC. But, management control at what level of equity will have to be decided when we have decided the structure of EoI”.

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