India cenbank likely to complete vetting bidders for IDBI Bank by Oct-end - sources
12/10/2023 10:19
By Nikunj Ohri
NEW DELHI, Oct 12 (Reuters) - India's central bank is
expected to accelerate a key process of vetting IDBI Bank's
IDBI.NS potential buyers and complete it by October end,
helping speed up the sale of a majority stake in the lender, two
government sources said.
The federal government, which owns 45.48% of IDBI Bank, and
the state-owned Life Insurance Corp of India LIFI.NS , which
holds 49.24%, together plan to sell 60.7% of the lender.
The Reserve Bank of India (RBI) began the vetting process
known as 'fit and proper criteria' in April, after Kotak
Mahindra Bank KTKM.NS , the Prem Watsa-backed CSB Bank
CSBB.NS and Emirates NBD ENBD.DU submitted their initial bid
to acquire a majority stake in IDBI Bank.
The RBI normally takes about 12-18 months to complete the
assessment before allowing an entity to run a bank.
"In discussions with the government, the RBI has conveyed
that the fit and proper assessment would be complete by
month-end," said one of the two government officials, who did
not want to be named.
Completing the vetting process early could allow the
government to invite bids in January-March, targeting a wrap-up
of the sale by the end of March, both the officials said.
India's finance ministry and the RBI did not immediately
respond to emails seeking comment.
The IDBI Bank stake sale is part of the government's 510
billion rupees ($6.13 billion) divestment target for fiscal
2024.
However, it is also the only significant divestment the
government is focusing on this year, raising concerns about the
target being met, as attention turns to the upcoming state and
national elections.
Once the RBI screening concludes, the government will grant
suitable bidders access to confidential data that IDBI Bank has
begun collecting, such as employees' pension corpus and
insurance or medical covers.
($1 = 83.1553 Indian rupees)
(Reporting by Nikunj Ohri; Editing by Janane Venkatraman)
((nikunj.ohri@thomsonreuters.com; +91 90284 60730; Reuters
Messaging: twitter.com/nikunj_ohri))