Bank Privatization: The government has been trying to sell its stake in IDBI Bank for many years, but this work has been postponed every time…
The central government has started the process of selling its stake in IDBI Bank. The government will soon appoint an asset valuer for IDBI Bank. For this, the government has invited bids from interested parties. Bids for this can be made till October 9.
Work going on as per plan
As per the government document, the asset valuer selected will have to appraise the properties of the bank and provide assistance during the entire process of sale. Earlier in a Mint news, it was claimed that the government may postpone the possible sale of its stake in IDBI Bank to the next financial year. However, with the latest move, it seems that the government is following the old plan.
Such is the government’s plan
The government plans to issue financial bids for IDBI Bank by December and sell its stake in IDBI Bank by the fourth quarter of the current financial year i.e. by March 2024. For this, the process had also started in July. Now the process of appointment of asset valuer has been taken forward.
Expecting approval from RBI soon
The Department of Investment and Public Asset Management ie DIPAM is handling the sale of this strategy. Since this strategic sale is related to a bank, it needs to be approved by the Reserve Bank. As of now, the proposed sale of government’s stake in IDBI Bank is yet to be approved by the Reserve Bank. It is being said that talks are going on with the Reserve Bank and approval can be given soon.
This is how the deal became attractive
The government’s direct stake in IDBI Bank is 49 percent, while 51 percent stake is with the government insurance company Life Insurance Corporation of India. Seen this way, technically IDBI Bank is no longer a government bank but a private sector bank. Apart from this, to make the deal more attractive, the government has also allowed foreign funds to hold more than 51 percent stake in IDBI Bank.
Proposed deals for this financial year
The government is expected to raise Rs 15,000 crore by selling its stake in IDBI Bank. In this financial year, the government has set a target of raising Rs 51,000 crore through disinvestment. Apart from IDBI Bank, privatization of companies like Shipping Corporation of India, NMDC Steel, BEML, HLL Lifecare, Container Corporation of India and Vizag Steel is proposed.
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