Irdai permits LIC to raise stake in debt-laden IDBI Bank to 51%
Insurance regulator Irdai on Friday permitted LIC to pick up to 51% stake in the debt ridden IDBI Bank, people aware of the development said.
The decision, they said was taken at a the meeting of the board of directors of Insurance Regulatory and Development Authority of India (Irdai) at Hyderabad on Friday afternoon.
LIC currently hold 11% stake in the bank. People aware of the matter added that if deal goes through, the IDBI Bank will get capital support of ₹10,000-₹13,000 crore.
State-owned LIC has been looking to enter the banking space by acquiring majority stake in IDBI Bank as the deal is expected to provide business synergies despite the lender’s stressed balance sheet.
“You will get to know whatever is the decision. You will get to know after the minutes of the board meeting are approved. We will be posting it on our website,” Irdai chairman Subhash Chandra Khuntia told reporters after the board meeting in Hyderabad.
However, according to sources the regulator has permitted the LIC to pick up to 51% stake in IDBI Bank, thereby relaxing existing rules for investment. As per norms, an insurance company cannot hold more than 15% stake in a company.
Meanwhile, IDBI Bank earlier on Friday had informed stock exchanges that no discussion has taken place with regard to capital injection of ₹13,000 crore in the bank by insurance major LIC.
NEW DELHI: