The Indian government and Life Insurance Corporation will sell 60.7% stake in IDBI Bank for Rs 52,878 crore to Canadian financial holding company Fairfax Financial Holdings Limited, said the Union Ministry of Finance on Wednesday.
The divestment would bring the “largest foreign direct investment in the financial sector of our economy so far”, added the ministry.
It said that IDBI Bank had “required repeated infusion of capital, initially provided by the Government of India” and later by Life Insurance Corporation.
In view of this, the Reserve Bank of India imposed several restrictions on the bank and the Cabinet Committee on Economic Affairs approved strategic restructuring of the financial institution.
“In compliance thereof, it was decided that an aggregate 60.72% of the equity stake in the IDBI Bank Limited be sold to a strategic buyer,” said the ministry. This would leave a shareholding of 15% with the Union government and 19% with Life Insurance Corporation.
Written by Tanya Shrivastava. Edited by Sneha.
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