The Cabinet on Wednesday gave in-principle approval for strategic disinvestment along with transfer of management control in IDBI Bank in line with the Budget announcement earlier this year.
The central government and LIC together own more than 94 per cent equity of IDBI Bank. LIC, currently the promoter of IDBI Bank with management control, has a 49.21 per cent stake.
The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi approved the strategic sale of IDBI Bank, an official statement said on Wednesday.
The extent of respective shareholding to be divested by the central government and LIC shall be decided at the time of structuring of transaction in consultation with the RBI, it said.
Finance Minister Nirmala Sitharaman while presenting the Budget 2021-22 had announced the privatisation of public sector banks (PSBs) as part of a disinvestment drive to garner Rs 1.75 lakh crore.
“Other than IDBI Bank, we propose to take up the privatization of two Public Sector Banks and one General Insurance company in the year 2021-22,” she had said.