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The union cabinet allowed LIC to gain further control over the IDBI bank by raising its stake to 51% in exchange of necessary fund infusion from the corporation.
The bank will issue preferential shares to the corporation and is expecting between Rs.10,000 crore to Rs.13,000 crore.
LIC currently holds 10.82% stake in the bank and will purchase additional shares to obtain control. The government currently holds 80.96% stake in IDBI and will reduced its stake to around 45%.
The finance minister Piyush Goyal called the decision “absolutely brilliant” and “win-win” as the corporation will benefit from the 2000 branches across the country and the bank will obtain necessary funding to support their expansion.
