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The Board of Directors of Life Insurance Corporation of India (LIC) will meet on Monday to discuss and approve a 51 percent equity plan in IDBI Bank Public Bank.
The insurance regulator has already given the green light for the proposal. Sources said the LIC Board of Directors is also likely to approve the deal.
The 12-member Board of Directors includes LIC President VK Sharma and his four Directors General as members.
the government, including the Department of Financial Services and the Department of Economic Affairs.
"The outlines of the deal, including structure, timing, investment will be decided today," said a source at Moneycontrol. LIC will have already been informed of the proposal, it will officially meet today to discuss the agreement.
LIC will hold 51% in IDBI Bank after the agreement and will be the largest shareholder of the bank.
India's Insurance Regulatory and Development Authority approved the agreement provided that the life insurer gradually reduces its stake in the bank after a few years.
The purpose of the operation is to inject capital into the bank, which faces after the approval of the LIC Board of Directors, the agreement will have to be approved by the Union Cabinet, the Capital Markets Regulator, the Securities and Exchange Board of India and the Reserve Bank of India.
Sources have indicated that LIC will take at least 5-7 years to help the bank in its recovery process, after which it will significantly reduce its participation.
IDBI Bank's net loss for the March quarter was widened to Rs 5,662.76 crore over weakening badet quality and an increase in provisions.
During the quarter, the lender's provisions for non-performing badets increased 77.9% year-over-year to Rs 10,773.30 crore.
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