A crucial meeting of an inter-ministerial group on disinvestment is scheduled to be held on August 8 to review progress in the planned divestment of IDBI Bank, top finance ministry sources have told Business Today Television.
"The inter-ministerial group will meet to oversee progress and decide on further steps. Post this, officials will finalise the valuation and method of disinvestment. Bidders will be invited to express interest by the end of this month," the source added.
The central government and the Life Insurance Corporation of India (LIC) are discussing offloading more than 51 per cent in IDBI Bank. However, a final decision will only be taken after a formal nod from the Reserve Bank of India (RBI).
“The government and LIC together hold 94 per cent equity in IDBI Bank. We have been in conversation with RBI on how much of equity can we dilute. Complete dilution of government stake is not necessary," the source said, adding that besides equity dilution, the centre is discussing the glide path and seeking relaxations in the promoter shareholding cap for a prospective buyer.
The current regulations restrict shareholding to 26 per cent, even for promoters and any stake held above that cap will require special approval from the regulator.
The government has amended the IDBI (Transfer of Undertaking and Repeal) Act, 2003, to grant a license to IDBI Bank under section 22 of the Banking Regulation Act.
The Cabinet Committee on Economic Affairs had given an in-principal approval for strategic disinvestment and transfer of management control in IDBI Bank in May last year.
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