IDBI Bank’s proposed sale marks a significant milestone in the government’s efforts to reduce its stake in the lender and advance its broader privatisation agenda.
\n\nThe Union Cabinet approved the sale of a 60.72% stake in IDBI Bank to Fairfax Financial Holdings’ subsidiary for Rs 52,878.08 crore. The Cabinet Committee on Economic Affairs (CCEA) led by Prime Minister Narendra Modi approved the Canadian entity as the strategic buyer.
\n\nIDBI was established in 1964 as the Industrial Development Bank of India to provide long-term financing to industries and support India’s industrial development.
\n\nIn 2004, IDBI transitioned into a banking entity, expanding its activities beyond industrial lending to include deposits, retail banking and other commercial banking services.
\n\nThe IDBI Bank came under pressure aftr its non-performing assets increased during the broader corporate bad-loan crisis.
\n\nThe Reserve Bank of India’s asset-quality review and tighter recognition of stressed loans also brought previously under-recognised bad assets into the banking system’s reported figures.
\n\nThe bank’s recovery subsequently became linked to efforts to improve asset quality, strengthen capital adequacy and reduce the burden of legacy stressed loans.
\n\nThe Kingfisher Airlines loan controversy involving businessman Vijay Mallya also became part of the scrutiny surrounding the bank’s lending decisions.
Original source: https://www.timesnownews.com/business-economy
