Are IDBI Bank's potential suitors good enough? RBI is checking
NEW DELHI : The long-delayed privatization of IDBI Bank may be about to speed up, with the central bank examining the suitability of potential bidders. Prem Watsa-backed CSB Bank, Kotak Mahindra Bank and Emirates NBD are among those who have submitted initial bids for the government's majority stake in IDBI Bank, media reports have said. According to two people aware of the matter, the Reserve Bank of India (RBI) is currently studying whether the potential bidders adhere to its 'fit and proper criteria' for running a financial services entity.
"The RBI is expected to inform the government about its findings soon, which could be sometime during the ongoing month (April)," one of the two people said on condition of anonymity. "The processes required to take the strategic divestment forward, post the regulator's certification, will likely be taken up by the new government after the announcement of the results of the general elections (on 4 June)," the person added. Spokespersons of the finance ministry and RBI didn't respond to emailed queries.
The government and Life Insurance Corp. of India (LIC) together hold 94.72% stake in IDBI Bank. While LIC holds 49.24%, the Centre holds 45.48%.
The Centre, which sought expressions of interest from prospective bidders in October 2022, is expected to sell about a 60.7% stake in the bank. After the RBI vetting is done, prospective bidders will be given access to the data room, which will be followed by a due diligence and invitation for financial bids, among other processes. In February, Tuhin Kanta Pandey, secretary in the Department of Investment and Public Asset Management (Dipam), told Mint that he expected the IDBI Bank divestment to pick up in the second half of FY25.
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