Government of India will allow consortium of foreign funds and investment firms to hold more than 51% stake in IDBI Bank Ltd, according to a government clarification issued today.
The current RBI guidelines restrict foreign ownership in new private banks. The central bank’s residency norm for promoters is applicable only for newly established banks and will not be applicable to an existing entity like IDBI Bank, the Department of Investment and Public Asset Management said in response to queries from interested bidders.
“The residence criterion shall not apply to a consortium of wealth investment vehicles incorporated outside India,” it said.
The Government of India and the RBI will also consider relaxing the five-year lock-in period for shares if a non-banking financial company is merged with IDBI Bank.
The clarification comes ahead of the December 16 deadline for submission of expression of interest for majority stake in IDBI Bank, one of the few lenders in which the government is trying to sell its stake.
The government and Life Insurance Corporation of India jointly hold 94.71% stake in IDBI Bank and are likely to sell 60.72%.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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