Bank Privatization: This government bank will be privatized after 3 months, the government has fixed the date

IDBI Bank Share Price: IDBI Bank’s shares have seen a slight decline for the last two days. According to the information given by the government, the work related to the sale of the bank is expected to be completed by the month of October.

IDBI Bank Disinvestment: The government is working on the privatization of some public sector banks. Now the government has announced that the strategic sale of IDBI Bank will be completed by the month of October. A senior official said that the process of IDBI Bank has gained momentum. Currently, the process of preparing a share purchase deal (SPA) with potential buyers is going on. This process is moving in the right direction.

Government and LIC hold 60.72% stake

It was told that on January 7, 2023, the Department of Investment and Public Asset Management (DIPAM) received several EOIs for 60.72% stake in the bank. This includes 30.48% stake of the government (about Rs 33,000 crore) and LIC’s 30.24% stake. Along with this, the management of the bank will also be transferred. The selected bidders include Fairfax India Holdings (promoter of CSB Bank), Emirates NBD and Kotak Mahindra Bank. These companies will have to submit their financial bids soon.

Government benefits from the sale

Selling IDBI Bank’s stake will help the government to get interest-free capital. The government has set a target of raising Rs 47,000 crore from disinvestment and asset monetization for the financial year 2026. To facilitate the sale, the government can assure the buyers in the share purchase agreement to give them complete freedom in the operation of the bank, such as change in management etc.

Appropriate provisions will be made

According to the Banking Regulation Act, 1949, the voting rights of a shareholder or shareholders working together cannot exceed 26%, even if their stake is more than this. The concerns of existing employees and other stakeholders will be taken into account while deciding the terms related to the sale. Appropriate provisions will be made for this in the share purchase agreement.

The country’s biggest deal

This deal will be the biggest deal ever in the country’s banking, financial services and insurance (BFSI) sector. Overall, this will be the second biggest deal after the Flipkart-Walmart deal. On Wednesday, IDBI Bank’s stock closed marginally higher at Rs 99.95 on the BSE. During Thursday’s trading session too, the stock saw a decline of 10 paise and is trending at Rs 99.85

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