IDBI Bank has been categorised as a private sector lender following acquisition of majority stake by LIC, RBI said.
Mumbai: IDBI Bank has been categorised as a private sector lender following the acquisition of majority stake by Life Insurance Corporation, RBI said.
In January, LIC completed the process of picking up a controlling 51 per cent stake in the nearly crippled IDBI Bank. "IDBI Bank has been categorised as a 'private sector bank' for regulatory purposes by Reserve Bank of India with effect from January 21, 2019, consequent upon LIC acquiring 51 per cent of the total paid-up equity share capital of the bank," RBI said in a statement.
IDBI Bank has been under the prompt corrective action framework of RBI that bans it from corporate lending and branch expansions, salary hikes and other regular activities. However, the lender has charted out a revival strategy to bring banking and insurance under one roof, along with its new owner Life Insurance Corporation (LIC).
Last week, IDBI Bank informed about the appointment of LIC as a corporate agent under bancassurance channel. In the long term, the bank and LIC will have a common investment strategy, use each other's resources like real estate, commercial and residential space, bank branches, premises and ATMs and digital marketing, among others, the bank had said.
Both entities will also undertake rationalisation of the common subsidiaries in mutual funds and life insurance arms, as per the strategic plan. For the December quarter of this fiscal, IDBI Bank reported widening of loss to Rs 4,185.48 crore as bad loans surged. The bank's gross non-performing assets (NPAs) shot up to 29.67 per cent of gross advances as of December 31, 2018, against 24.72 per cent in the year-ago period.