IDBI Bank Nears Strategic Sale: Final Clearance Awaited

The potential investors in IDBI Bank received security clearance from the Home Ministry. A nod from the Reserve Bank is anticipated soon. The government and LIC are selling a 61% stake in the bank. Clearance from both the Home Ministry and RBI is required before investors can access the data room for due diligence.

Potential investors in IDBI Bank have received the necessary security clearance from the Home Ministry, with final approval from the Reserve Bank expected imminently, according to an official statement on Thursday.

The government, in conjunction with LIC, is offloading a majority 61 per cent stake in IDBI Bank, which includes 30.48 per cent from the Government of India and 30.24 per cent from LIC.

In January 2023, the Department of Investment and Public Asset Management (DIPAM) disclosed that multiple Expressions of Interest (EoI) had been received to purchase a stake in the bank. These bidders must secure clearances from both the Home Ministry for security and the Reserve Bank of India (RBI) to meet the 'fit and proper' criteria.

The RBI has spent over a year and a half scrutinizing details submitted by potential investors, causing delays in the privatization timeline for IDBI Bank. "Security clearance for potential bidders has already been granted, with the RBI's approval expected soon," an official told PTI.

Once the required clearances are obtained, investors will gain access to the data room, kicking off the due diligence process, the official added. Shares of IDBI Bank surged, closing at Rs 102.12, up 4.70 per cent on the BSE.

The government and LIC currently hold a 94.72 per cent stake in IDBI Bank, which will reduce to 34 per cent post-strategic sale. The government aims to raise Rs 50,000 crore from disinvestment and asset monetisation in the current fiscal year.

(With inputs from agencies.)