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LIC gets IRDA nod to pick up 51 per cent stake in IDBI Bank
Insurance behemoth LIC will acquire up to 51 per cent stake in state-owned IDBI Bank after regulator Irdai approved the plan that will help convert the debt-ridden lender into a private sector entity.
New Delhi: Insurance behemoth LIC will acquire up to 51 per cent stake in state-owned IDBI Bank after regulator Irdai approved the plan that will help convert the debt-ridden lender into a private sector entity.
According to sources, the board of Insurance Regulatory and Development Authority of India (Irdai) at its meeting held today in Hyderabad permitted Life Insurance Corporation (LIC) to increase the current stake from 10.82 per cent to 51 per cent in IDBI Bank.
This would be in deviation from the existing rules which restrict any insurers having stake beyond 15 per cent in the financial firms. Sources added that if the deal goes through, the IDBI Bank would get a capital support of Rs 10,000-Rs 13,000 crore.
State-owned LIC has been looking to enter the banking space by acquiring a majority stake in IDBI Bank as the deal is expected to provide business synergies despite the lender's stressed balance sheet. For LIC it will get about 2,000 branches through which it can sell its products while the bank would get massive funds of LIC.
The bank would also get accounts of about 22 crore policy holders and subsequent flow of fund into their account.
