LIC board approves acquisition of 51% stake in IDBI Bank
What's the story
The LIC board today gave approval to the insurance behemoth for acquiring of up to 51% stake in IDBI Bank, Economic Affairs Secretary SC Garg said today. Now the state-owned Life Insurance Corporation of India (LIC) will approach markets regulator SEBI. LIC's stake buy will help the debt-ridden state-owned bank get a capital support of Rs. 10,000-13,000 crore. Here are more details.
Banking sector
LIC will enter into banking sector with IDBI acquisition
LIC has been looking to enter the banking space by acquiring a majority stake in IDBI Bank as the deal is expected to provide business synergies. It will get about 2,000 branches through which it can sell its products, while the bank would get massive funds of LIC. The bank would also get accounts of about 22 crore policyholders and subsequent flow of fund.
Information
IDBI Bank will get capital support to revive its fortune
Once the deal goes through, IDBI Bank, which is grappling with mounting toxic loans with gross non-performing assets rising to a staggering Rs. 55,600 crore at the end of the March quarter, will get much-needed capital support to revive its fortune.