New IDBI owners can receive a roadmap from RBI to reduce participation

The Reserve Bank of India (RBI) is expected to present a roadmap to the new owners of IDBI Bank to reduce their stake as the government plans to sell its capital along with the shares held by Life Insurance Corporation (LIC) Has not confirmed views on the new private banking licensing rules, the announcement of the new structure could help fuel interest from the lender whom the centre has been trying to reposition for two decades. but with little success.
In the past, the RBI has indicated that the sale of the state share and the announcement of the new rules were not linked. However, sources said the government had spoken to the RBI about selling the shares and the regulator is aware of the need to provide a roadmap for potential buyers.
Current guidelines provide for a minimum participation of 40% in the paid-in capital or voting rights, which must be diluted to 2030% in 10 years and further reduced to 1,526 between 12 and 15 years, depending on the age of the license. An internal group of the RBI had proposed to revise it and give company houses access.
Many bidders can clarify these questions. Recently, the Investment and Public Asset Management division announced that the government and LIC would determine the size of the share sale as the deal closed.
Although private investors are interested in the government not being involved, as NITI Aayog pointed out in some of their recommendations, government sources say bidders should decide the best course of action. “Someone might want majority control while someone might want to work with a low stake. Let the bidders decide,” a source said.
The state currently holds a 45.5% stake in the financial institution, which has been converted into a universal bank, with a 49.2% stake in LIC. On Friday the bank’s stake in BSE rose 0.4% to Rs 37.9 but is still below the LIC acquisition price. IDBI Bank in three tranches.

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