The decision regarding IDBI Bank has been taken in the meeting of Cabinet and CCEA (Cabinet Committee on Economic Affairs) today under the chairmanship of Prime Minister Narendra Modi.
The Cabinet and CCEA (Cabinet Committee on Economic Affairs) meeting chaired by Prime Minister Narendra Modi has approved the sale of entire stake in IDBI Bank today. The CCEA has stamped its seal. Finance Minister Nirmala Sitharaman also mentioned this bank in her budget speech. He was talking about selling it somewhere. Let us tell you that the Life Insurance Corporation of India (LIC) and the government invested Rs 9,300 crore in the form of equity capital to get IDBI Bank out of the crisis. Now LIC has the command of this bank.
IDBI was a government bank, formed in the country in 1964. LIC had bought 51% stake in IDBI by investing 21000 crore rupees. After this, LIC and the government together gave 9300 crore rupees to IDBI Bank. The government holds around 45.48 per cent stake in IDBI Bank and has been classified as a private bank after it was acquired by LIC.
What happened in the cabinet today
In the CCEA meeting today, IDBI has approved the strategic stake sale and transfer of management control in the bank. Currently, the government holds 45.48 per cent and LIC holds 49.24 per cent.
The LIC board had already approved reducing the stake in the bank. In the budget, Nirmala Sitharaman proposed to sell a stake in IDBI Bank in the financial year 2021-22. After this, on March 10, the Reserve Bank has removed IDBI from the Prompt Corrective Action (PCA) framework.
Now what will happen to customers and employees
Experts say that it will not have any effect on employees and customers. Employees’ jobs will continue as before. All such customers will continue to get all the facilities.
After 5 years, the bank turned profitable from losses
IDBI Bank has turned profitable after five years. In the financial year ended 31 March 2021, the bank has earned a profit of Rs 1,359 crore. A year earlier, the bank had a loss of Rs 12,887 crore in the financial year 2019-20.
The bank’s gross NPA improved to 22.37 percent as on March 31, 2021. It was recorded 27.53 per cent in the same period a year ago. The net NPA improved to 1.97 percent, from 4.19 percent a year ago.
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