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New Delhi : The IRDAI Insurance Regulator (India's Insurance Regulatory and Development Authority) on Friday allowed Life Insurance Corporation (LIC) to take a 51% stake in the indebted Bank IDBI Bank,
. The decision, they said, was made at a meeting of the IRDAI board of directors in Hyderabad on Friday afternoon.
LIC currently holds an 11 percent stake in the bank. Sources added that if the deal is concluded, IDBI Bank will get a capital support of Rs 10,000 crore-Rs 13,000 crore. The LIC, held by the state, was seeking to enter the banking space by acquiring a majority stake in IDBI Bank because the agreement should create commercial synergies despite the lender's stressed record. [Lirelasuite: IDBIBank-LICDeal: BoardstoTakeUnappelditleresponsableduministeredFinance]
"You will take notice of the decision, you will learn after the approval of the minutes of the meeting of the Board of Directors and we will We will post on our website ". Chandra Khuntia told reporters after the meeting of the board of directors in Hyderabad
However, according to sources, the regulator allowed the LIC to take up to 51 percent stake in IDBI Bank, softener thus the existing rules for investment
. read: B Sriram appointed CEO of IDBI Bank | Mahesh Jain appointed deputy governor of the RBI)
According to standards, an insurance company can only hold more than 15% of the equity of a company. IDBI's bank is struggling with rising toxic loans with gross underperforming badets rising to a staggering Rs 55,600 crore at the end of the last quarter of March.
During the three months, the net loss of the lender rose to Rs 5,663 crore. (function (d, s, id) {var js, fjs = d.getElementsByTagName (s) [0]; if (d.getElementById (id)) returns; js = d.createElement (s); js.id = id ; js.src = "http://connect.facebook.net/en_US/sdk.js#xfbml=1&version=v2.5&appId=213741912058651";fjs.parentNode.insertBefore(js, fjs);} (document, & # 39; script; & # 39; facebook-jssdk & # 39;));
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