Decision on IDBI Bank stake sale likely this fiscal: Kishor Kharat

By: |
New Delhi | Published: June 6, 2016 10:07:34 PM

Government is working on the stake sale of IDBI Bank and a decision in this regard could be taken during the current fiscal, its Managing Director Kishor Kharat today said.

IDBI bank, Kishor Kharat, fiscal year, banking and insuranceAs per the existing norms, government equity in a public sector bank cannot go below 52 per cent to maintain the character of state-owned banks.

Government is working on the stake sale of IDBI Bank and a decision in this regard could be taken during the current fiscal, its Managing Director Kishor Kharat today said.

“Government is working on it. They have declared in the Budget itself,” he said.

“There are many players. I have met almost 56 foreign players during QIP, 22 domestic players. There are no time lines drawn but if you look at the record of the government, whatever they say in previous Budget, before going to next fiscal, they complete. So, from that you can draw some timeline,” he said.

The government in December gave approval to IDBI Bank for raising Rs 3,771 crore during the year, by way of Qualified Institutional Placement (QIP), a move which will dilute its holding by about 26 per cent in the lender.

The government’s holding in the bank stands at 73.98 per cent.

As per the existing norms, government equity in a public sector bank cannot go below 52 per cent to maintain the character of state-owned banks.

Finance Minister Arun Jaitley had last year indicated a change in the characteristics of IDBI Bank wherein government would have a majority stake, but at the same time maintain an arm’s-length distance.

Citing the example of Axis Bank, he had wondered if IDBI Bank can follow that model.

The government indirectly controls 29.19 per cent in Axis Bank through the administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), the Life Insurance Corp and four other public sector general insurance companies.

IDBI Bank came into existence with Parliament passing the IDBI Repeal Act in 2003. In terms of provisions of the Act, IDBI has been functioning as a bank in addition to its earlier role of a financial institution.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1Kotak Mahindra Bank expects 20% credit growth in FY17 
27th Pay Commission, rising crude may come in way of lower EMIs
3DBS India returns to black, posts Rs 8.6 cr profit for FY16