Govt set to launch sale of IDBI Bank around Diwali

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Govt set to launch sale of IDBI Bank around Diwali

Sources tell Business Today television that the central government is looking to launch the sale of IDBI Bank around Diwali by the end of October.

A crucial meeting was held recently by an inter-ministerial group on disinvestment. A government official said we were waiting for clearance to proceed with the sale process.

The Life Insurance Corporation of India LIC and the Central Government are discussing the transfer of 51 per cent of IDBI Bank. A final decision will only be made after a formal nod from the Reserve Bank of India. Sources say that the government and LIC could offload close to 61 percent of the stake in IDBI. There are still a few challenges that the government is tackling. Let's remember that this is the first such transaction in the banking sector, where a bank has to find suitable suitors through an open, fair, and competitive process. "We have to involve both regulators and change certain criteria in a gradual way," said a government official.

The IDBI Transfer of Undertaking and Repeal Act, 2003, was amended by the government to grant a license to IDBI Bank under section 22 of the Banking Regulation Act.

The Cabinet Committee on Economic Affairs approved the strategic disinvestment and transfer of management control in IDBI Bank in May of last year.