LIC Board Approves to Buy Upto 51% in IDBI Bank; Debt-Ridden Bank to Get a Capital Support of Rs 100–130 Billion
As per the report, LIC will get about 2,000 branches through which it can sell its products, while IDBI Bank would get funds infusion from LIC.
Mumbai, July 16: Life Insurance Corporation (LIC) of India Board has approved the proposal to buy up to 51 percent stake in IDBI Bank Ltd, said Economic Affairs Secretary Subhash Chandra Garg. He further stated that if required, LIC will make an open offer. Insurance regulator Irdai has already given its approval to LIC to increase its stake to 51 percent in IDBI Bank, n the condition that the life insurer will gradually bring its stake in the bank down after a few years. The deal will require the approval of the bank's board, and the government.
According to a report on Business Standard, LIC stake buy will help the debt-ridden state-owned bank get a capital support of Rs 100-130 billion. It is expected to provide the much needed relief to the stressed balance sheet of the bank, and provide business synergies options.
As per the report, LIC will get about 2,000 branches through which it can sell its products, while IDBI Bank would get funds infusion from LIC. As per sources, LIC will take at least 5-7 years to help the bank in its recovery process, after which it will reduce its stake considerably.
(The above story first appeared on LatestLY on Jul 16, 2018 03:32 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).