IDBI Bank on Saturday announced that its board has approved the proposal to sell a portion of its 48% stake in IDBI Federal Life Insurance Company Limited (IFLI).
The lender plans to sell a part of its stake to Federal Bank and its Dutch partner Ageas Insurance International NV.
The stake sale of 27% in the venture will result in IDBI Bank's holding coming down to 21%, as per the regulatory filing.
Post the stake sale, Ageas's stake in the insurance company will increase by 23% to 49%, while Federal Bank's stake will increase by 4% to 30%.
Bank has to divest its stake in its insurance joint venture due to the insurance regulations, according to which an insurer cannot own more than 10% stake in another insurer. LIC received indirect ownership at the insurance firm after it had acquired a 51% controlling stake in IDBI Bank in January 2019.
"The decision is subject to all regulatory approvals to be taken by all related parties and agreements which are yet to be finalised," IDBI Bank said in a statement.