The consortium of investment companies will be able to own 51 per cent of the IDBI bank, he said on Tuesday. Foreign ownership criteria were for new private and were not applicable on existing ones.
This comes ahead of the December 16 deadline for potential bidders to submit expressions of interest EoIs for picking up a majority stake in the private sector lender.
The residency requirement of the promoter is under the Reserve Bank of India's guidelines. However, for the purposes of the transaction, the said residency criteria will not apply to a consortium consisting of funds investment vehicle incorporated outside India, the Department of Investment and Public Asset Management Dipam said in response to a potential bidder s queries on Tuesday.
The provisions of the Banking Regulation Act, 1949, and the Master Directions on Amalgamation of Private Sector Banks as amended from time to time will be addressed suitably, in consultation with the RBI on a case-to-case basis, and the central bank will relax the five-year lock-in period for shares if the bank is merged with a non-banking financial company NBFC, according to the department.
Life Insurance Corporation LIC holds 49.24 per cent and 45.48 per cent in IDBI Bank.
Together they hold 94.72 per cent, while the public shareholding is 5.28 per cent.
In October, the government and the LIC decided to offload a little over 30 per cent of the information memorandum, inviting EoIs for an aggregate 60.72 per cent stake, along with management control.
The Centre is looking at a valuation of around 60,000 crore, which is higher than IDBI Bank's current market value. After they submit their financial bids, the deal involves a two-stage process by which potential bidders must pass the RBI s fit and proper criteria.