The state-run IDBI Bank, which is nearing its merger-completion with country’s largest insurer LIC, announced on Wednesday that veteran banker Rakesh Sharma has taken charge as the new MD and CEO of the bank. The government had announced his appointment for a period of six months with the bank on October 5. He had earlier served Canara Bank as its top boss. Now, when Sharma has finally assumed the leadership charge, the cash-strapped bank needs to chalk out a robust plan to revive the its finances.
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Here are 2 key challenges before him:
LIC merger: Even though LIC received government’s nod to hike its stake in the PSU bank to a maximum of 51 percent so as to assist it amid NPA crisis, he needs to ensure the final merger proceedings end up smoothly. LIC will now pump Rs 10,000-12,000 crore for 51 percent in stake IDBI, from 7.89 percent shares it held on June 2018.
NPA mess: IDBI’s net NPAs stood at 18.76 percent at June end, higher than the 16.69 percent at the closing of the previous quarter and 15.8 percent at the end of the same quarter 2017. The central government owns 85.96 percent currently, which will be go down to below 43 percent.
Meanwhile, LIC’s open offer opens December 3 and closes December 14, cogencies reported.
The shares of IDBI Bank were trading at 58.75 down 0.51 percent on BSE at the time of reporting.