With a view to increasing its capital base, the government on Tuesday approved more than Rs 9,000 crore capital infusion in the stressed IDBI Bank.
With a view to increasing its capital base, the government on Tuesday approved more than Rs 9,000 crore capital infusion in the stressed IDBI Bank. The decision was taken by the Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi. The shares of the bank jumped 10 per cent to Rs 29.65 per share intraday after getting Union Cabinet approval of one-time infusion of fresh capital worth Rs 9,257 crore by the government and LIC. The stock closed the day at Rs 28.35, up 1.55, or 5.78% on BSE.
Of Rs 9,000 crore, the government will provide Rs 4,557 crore as one-time re-capitalisation to IDBI Bank and LIC will infuse Rs 4,700 crore, Information and Broadcasting Minister Prakash Javadekar told reporters.The LIC acquired a 51 per cent stake in the IDBI Bank in January this year.
In a separate announcement, the government also approved a rise in ethanol price procured by public sector oil marketing companies (OMCs) for one year beginning December. The price of ethanol derived from C heavy molasses has been increased from Rs 43.46 a litre to Rs 43.75 per litre, and for B heavy molasses to Rs 54.27 per litre from Rs 52.43 earlier, the government said.
In addition, the ethanol price from sugarcane juice, sugar, sugar syrup route has been fixed at Rs 59.48 per litre. The new prices have received approval for the upcoming sugar season FY20. The revised prices will be applicable from December 1, 2019 to November 30, 2020.
Meanwhile, the government recently announced a slew of measures to revive slowing economy including a capital infusion of Rs 70,000 crore to public sector banks. Even though the announcement was made in the Budget, the fund will now be provided immediately to the banks.