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The offer of the Life Insurance Corporation of India (LIC) to acquire a controlling interest in IDBI Bank is expected to be approved by the Insurance Regulatory and Development Authority of India. India (IRDAI), when the board of regulators will meet on Friday. ] The IRDAI Board will consider whether the agreement meets all the necessary regulatory standards. According to the regulator's investment standards, insurance companies can only hold more than 15% of the equity of a company.
However, LIC invested in companies like ITC and Larsen & Toubro, where it exceeded that limit. It already holds 10.8% in IDBI Bank
"The board of directors will examine the structure of the transaction and will be more inclined to make a decision in favor of it," said a source at Moneycontrol [19659004]. of the day. Sources also said that the 15 percent cap will not be removed, but that special attention will be given to this transaction. The schedule for the reduction of interest in other banks by LIC will also be decided.
Another source said that government officials and senior officials of the Ministry of Finance are already in contact with IRDAI about this.
consider this case as a special case and not split it with other investments made by large insurers like LIC in the past. The 15% rule can therefore apply to this transaction.
The manner in which the sale of the interest will be executed will also be discussed. Insurance companies have two accounts, a shareholder account and a subscriber account. LIC will probably be invited to tap into its shareholder account to pay this deal.
The IRDAI Board of Directors, which is meeting for the first time under the new President Subhash Chandra Khuntia, will also discuss other issues, including the preference for foreign reinsurers. India branches in treaties, distribution reforms, and the sale of insurance products via e-commerce.
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