On Tuesday, the Cabinet has approved a capital infusion plan of Rs 9,300 crore for IDBI Bank. The Cabinet cleared the IDBI Bank recapitalisation plan with a one-time infusion of funds by the government and Life Insurance Corporation (LIC), said minister of environment and information and broadcasting, Prakash Javadekar.
The recapitalisation plan will put IDBI Bank ‘in the front foot to take the normal banking activities to the next level’.  Since the announcement was made, the shares in IDBI Bank jumped as much as 10.84 per cent in intraday trade.
According to the official statement, this infusion will enable IDBI Bank to return to profitability and normal lending, and give the government the option of recovering its investment at an opportune time. The government will provide a one-time recapitalisation of Rs. 4,557 crore to IDBI Bank, Javadekar said, adding that LIC will infuse Rs. 4,743 crore.
The minister reiterated that as part of the Budget 2019-20, the government provided support of Rs 70,000 crore for recapitalisation of public sector banks.
LIC has a 51 per cent share in IDBI Bank, whereas the remaining 49 per cent stake is with the government. ‘In that proportion, both (LIC and government) will contribute to the capital adequacy so that the bank can work efficiently,’ said the minister.
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