The Reserve Bank of India (RBI) has turned down IDBI Bank's proposal to change its name to either LIC IDBI Bank or LIC Bank following the transfer of controlling 51 % to Life Insurance Corporation (LIC) from the government of India.
Background:
IDBI (Industrial Development Bank of India) Bank was established in 1964 by an Act of Parliament as a wholly owned subsidiary of the Reserve Bank of India (RBI).
It was established as a specialised development financial institution (DFI) – on the lines of NABARD, NHB and SIDBI – to provide credit and other financial facilities for the development of Indian industry.
In 1976, the ownership of IDBI was transferred to the Government of India.
In 2004 it was converted into a commercial bank when RBI incorporated IDBI as a 'scheduled bank' under the RBI Act, 1934.
Recent deal: Timeline
Background: The IDBI Bank’s financial health has been deteriorating. Its gross Non-Performing Assets (NPAs) at the end of March 2018 was 28% of advances.
August 2018: the cabinet had approved the acquisition of controlling stake by LIC as a promoter in the bank through a combination of preferential allotment and open offer of equity.
September 2018: following the transfer of controlling 51 % to LIC from the government of India, the government holding came down to 46.46 % from nearly 86 %, while LIC stake increased from about 8 % to 51 %.
January 2019: LIC completed the acquisition of 51 % controlling stake in IDBI Bank, marking the entry of the LIC into the banking space.
March 2019: RBI changed the categorisation of IDBI Bank to a private sector lender from public sector lender following acquisition of majority stake by LIC.
Dear Student,
You have still not entered your mailing address. Please enter the address where all the study materials will be sent to you. (If applicable).
