In early trade on November 17, IDBI Bank Limited witnessed a decline of 3.66% following statements from the Secretary of the Department of Investment and Public Asset Management (DIPAM), indicating that the stake sale might not be concluded this year. The delay is attributed to pending mandatory approvals from the Reserve Bank of India (RBI).
While DIPAM assured that the transaction is progressing, compliance with RBI’s fit and proper criteria remains a crucial aspect yet to be fulfilled.
“We practically don’t think that before March we can conclude (the sale of IDBI Bank),” stated DIPAM Secretary Tuhin Kanta Pandey during a media event organized by FICCI.
The RBI initiated the fit and proper criteria process in April after potential stakeholders, including Kotak Mahindra Bank, CSB Bank backed by Prem Watsa, and Emirates NBD, expressed interest in acquiring a stake in the Mumbai-based lender.
As part of the regulatory requirement, all banks are mandated to establish a Nomination and Remuneration Committee (NRC) comprising a minimum of three non-executive directors from the board of directors.
Presently, the government holds over 45% of IDBI Bank, with Life Insurance Corporation of India owning a 49% stake. Both entities have planned to sell approximately 60.7% of their combined stake in the bank.
At 1:32 pm, IDBI Bank shares were trading 3.89% lower at ₹63.05.