In an important step towards the privatization of IDBI banks, the Securities and Exchange Commission of India (SEBI) has approved the reclassification of Life Insurance Corporation (LIC) as a public shareholder, which the bank informed the stock exchange.
This means that LIC will now be considered any other public investor in IDBI Bank. According to SEBI regulations, LIC’s voting rights in banks will be limited to 10% of the total voting rights.
“The voting rights of LIC shall not exceed 10% (10%) of IDBI Bank’s net valid voting rights,” the company said in its regulatory filing.
Add Zee business as your preferred source
The insurance company will not participate in the bank’s management, will not enjoy any special rights, nor will it be represented on the board of directors.
LIC still owns significant shares in the bank and will outline its plans for reclassification and share it with the public quote process of new buyers in the quote letter.
Insurance companies are also required to reduce their stake to 15% within two years of the end of IDBI Bank’s strategic investment period.
After SEBI approval, the bank will now conduct a stock exchange so that it will officially complete the reclassification of LIC.
The move is seen as a major milestone in the process of IDBI’s banking privatization because it brings the lender’s ownership structure to regulatory requirements.
On August 21, Secretary of the Department of Investment and Public Asset Management (DIPAM) arunish Chawla told NDTV Profit that the expression of the interest process for the sale of IDBI Bank shares has been completed and due diligence is underway.
The government may invite financial bids for a share sale in the third quarter of this fiscal year.
