New Delhi: Insurance regulator IRDAI Monday said it has sought proposal from Life Insurance Corporation of India (LIC) for paring its shareholding in the recently acquired controlling stake in IDBI Bank.
Insurance Regulatory and Development Authority of India (IRDAI) stipulates that insurers are allowed to hold only up to 15 per cent stake in any listed entity. But LIC, with a special dispensation from IRDAI, holds more than the limit in some state-run banks. Besides, the Reserve Bank permits a ceiling of 15 per cent for promoter stake in a private sector bank.
“We will decide on the timeline (for stake reduction by LIC in IDBI Bank). We are not leaving it to them. I have asked them (LIC) to give a proposal and after that we will take a decision,” IRDAI Chairman Subhash Chandra Khuntia said on the sidelines of an event organised by Ficci here. Last June, IRDAI permitted LIC to acquire up to 51 per cent stake in debt-ridden IDBI Bank.
On December 28, LIC pumped Rs 14,500 crore into the bank as part of its takeover, following which it injected another Rs 5,030 crore on January 21. As a result, LIC acquired 51 per cent controlling stake in the bank, making the insurer the lender’s majority shareholder.
For the third quarter ended December 2018, IDBI Bank reported widening of loss by nearly threefold to Rs 4,185.48 crore. The bank had reported a loss of Rs 1,524.31 crore in the year-ago period.