The Reserve Bank of India (RBI) on Thursday (14/03/19) categorized the IDBI Bank as the ‘Private Sector lender” after the acquisition lender by Life insurance Corporation (LIC).
The central bank in a press release said, “IDBI Bank Limited has been categorized as a ‘Private Sector Bank’ for regulatory purposes by Reserve Bank of India with effect from January 21, 2019 consequent upon Life Insurance Corporation of India acquiring 51% of the total paid-up equity share capital of the bank.”
The new change would be be effective retrospectively from 21st January.
Earlier, in 2005 RBI categorized IDBI Bank Limited as “other Public Sector Bank”. This categorization by RBI was “in view of the assurance to the Parliament given on December 8, 2004, by the Finance Minister during the discussion on the Repeal Bill, 2003, that the government holding in IDBI Ltd would always be above 51%.”
Last month, some media reports said Life Insurance Corporation (LIC) might infuse fresh capital of around ₹12,000 Crore to help meet the private lender its mounting Non Performing Assets (NPA) and provision requirements. LIC has a controlling stake of 51% in IDBI Bank.
In its third quarter report ending December 31, the bank reported a three fold rise in its losses with net loss mounting to ₹4,185 Crore. Also the income in third quarter decreased from ₹7,125.20 Crore to ₹6,190.94 Crore.