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Senior banker Rakesh Sharma has been appointed as managing director (MD) and chief executive officer (CEO) of IDBI Bank by the government. Sharma appointment is termed for six months or until further orders and will have the task of ensuring a smooth transfer of majority ownership from the government to Life Insurance Corporation of India (LIC).
He will take over from B. Sriram, former MD of the State Bank of India (SBI), whose short three-month term leadership of IDBI Bank ended last month. Sharma is a former MD and CEO of Canara Bank till June 2018 and was among the few bankers roped in 2015 from the private sector to lead big state-run banks (Canara Bank and Bank of Baroda).
LIC is currently in the process of taking over majority ownership of IDBI Bank as it looks to start its banking foray at the lender. Last week it made an open offer for 26% of IDBI shares amounting to more than Rs. 12,000 crores.
The IDBI is said to be in a dire situation, as the bank’s losses widened to Rs 8,237.92 crores in the financial year ended 31 March from Rs 5,158 crores in the previous year.
Its asset quality has also deteriorated with gross bad loans almost doubling to Rs. 55,588.26 crore during 2017-18 or 32.36% of the bank’s gross advances during the year.
