The government is likely to sell IDBI Bank before the polling dates of Lok Sabha Elections 2024 are announced. As per BQ Prime, the government is in talks with some selected bidders regarding this and is trying to complete this transaction by March 2024.
The group making potential bidders includes Prem Vats’s Fairfax, Kotak Mahindra Bank, and private equity investor Avenue Capital. The Department of Investment and Public Asset Management is also trying to get the Reserve Bank of India (RBI) to speed up the process.
According to Reuters, RBI may end its mandatory investigation process this month. However, this isn’t confirmed yet.
Reserve Bank’s scrutiny is important to complete the sale. RBI has taken a strict stance regarding which type of banks can apply to buy a stake in IDBI Bank. The government announced the official sale process for IDBI Bank last year. Bidders can buy up to 30.48% government stake in IDBI Bank and an additional 30.24% stake in Life Insurance Corporation of India.
Meanwhile, IDBI Bank will offload stressed corporate accounts, so that the balance sheet can be improved.
(Courtesy – BQ Prime)