IDBI Bank Stake Sale: Government's Bold Move to Reshape Banking Sector

The government plans to sell a 60% stake in IDBI Bank by the end of the fiscal year, with the aim of meeting SEBI's public shareholding requirement. Additionally, divestments will occur in several state-run banks. Axis Bank expresses interest in participating in acquisition financing following recent policy changes.

The government is gearing up for a major stake sale in IDBI Bank, set to conclude by the end of the fiscal year, according to M Nagaraju, Secretary of the Department of Financial Services. With a 60% stake on the line, this move signifies a significant reshuffling in the banking sector, aiming to comply with SEBI's public shareholding norms.

In parallel, the government is also planning divestments in several other state-run banks, offering up to 20% stakes in four lenders. This action seeks to reduce government ownership to below 75%, aligning with previous disclosures and ensuring regulatory compliance.

On another front, Axis Bank, represented by its managing director, Amitabh Chaudhry, expressed a keen interest in providing acquisition financing. This follows a recent RBI decision allowing domestic banks into the acquisition finance domain, a segment currently dominated by foreign lenders.

(With inputs from agencies.)