MUMBAI: IDBI Bank has officially joined the stable of private sector banks bringing down the number of public sector banks in the country from the earlier 21 to 20.
The RBI non Thursday issued a press statement to that extent. An IDBI filing to the stock market reads, “RBI vide press release dated March 14, 2019 categorised IDBI Bank Ltd as a private sector bank for regulatory purposes with effect from January 21, 2019 consequent upon Life Insurance Corporation of India acquiring 51 per cent of the total paid up equity share capital of the bank.”
LIC on January 21 had completed the acquisition of 51 per cent controlling stake in IDBI Bank, marking the entry of more than 60 years old state-owned insurer into the banking space.
“The deal, conceptualised in June 2018, is envisaged as a win-win situation for both IDBI Bank and LIC with an opportunity to create enormous value for shareholders, customers & employees of both entities through mutual synergies,” IDBI Bank said in a BSE filing then.
The development followed an earlier Cabinet decision giving approval for the LIC to acquire a controlling stake as a promoter in the bank through a combination of preferential allotment and open offer of equity.
The move to bail out IDBI Bank gained speed after the bank reported a net loss of Rs3,602.49 crore for the September quarter of 2018-19. Its gross non-performing assets had hit 31.78 per cent (Rs 60,875.49 crore) of the gross advances as on September 30, 2018, as compared with 24.98 per cent in the year-ago period.