Reserve Bank of India (RBI) earlier this month took IDBI Bank out of the Prompt Corrective Action (PCA) framework.
(Photo: IDBI)
The Centre is eying to achieve its ambitious Rs 1.75 lakh crore disinvestment target for 2021-22 with the Union Cabinet considering to move ahead to privatise the IDBI Bank from next week, reports stated on Tuesday.
The LIC-owned IDBI Bank would be the first-ever public sector bank to be put on the block.
Reports suggested that the government and LIC Corp will consider divesting their stakes in the bank. Currently, the government owns 45.48 per cent and the Life Insurance Corporation (LIC) a 49.24 per cent stake in the bank.
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The government’s move comes after the Reserve Bank of India (RBI) earlier this month took IDBI Bank out of the Prompt Corrective Action (PCA) framework.
LIC was brought in when the lender was in trouble, but now the government believes that the phase is over. As per bank’s published results for the December quarter, 2020, the lender is not in breach of the PCA parameters on regulatory capital, net NPA and leverage ratio.
The RBI had put the bank under the PCA in May 2017.
It is worth mentioning that the privatisation of IDBI Bank is apart from the two other state-run banks that would be put on sale in next financial year.
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