The central government is looking to launch the sale process of IDBI Bank around Diwali by the last week of October, sources tell Business Today television.
"A crucial meeting of an inter-ministerial group on disinvestment was held recently. We are awaiting clearance to proceed with the sale process,” said a government official.
The central government and the Life Insurance Corporation of India (LIC) are discussing offloading more than 51 per cent of IDBI Bank. However, a final decision will only be taken after a formal nod from the Reserve Bank of India (RBI).
Sources say that the government and LIC together could offload close to 61 percent of the stake in IDBI. However, there are still a few challenges that the government is tackling. "Let's remember that this is the first such transaction in the banking sector, where a bank has to find suitable suitors through an open, fair, and competitive process. We have to involve both the regulators and amend certain criteria in a gradual way," added a government official.
The government has amended the IDBI (Transfer of Undertaking and Repeal) Act, 2003, to grant a licence to IDBI Bank under section 22 of the Banking Regulation Act.
In May of last year, the Cabinet Committee on Economic Affairs approved in principle the strategic disinvestment and transfer of management control in IDBI Bank.
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