INSUBCONTINENT EXCLUSIVE:
HYDERABAD: Insurance Regulatory and Development Authority of India (Irdai) will set a timeline for LIC to bring down its stake in IDBI Bank
to below 15 per cent, its chairman Subhash Khuntia said.
He clarified that the insurance giant has been given the approval to acquire 51 per
cent stake on the condition of bringing it down to below 15 per cent over a period of time but the timeline would depend on the business
plan of LIC for the troubled lender.
"We will have to ask them to bring down the stake
That is the condition under which they have been given permission
They have to bring down the stake to 15 per cent eventually," the IRDAI chairman told PTI.
At present, the permissible limit for an insurer
to hold stake in any listed entity is 15 per cent
But LIC with special dispensation from Irdai holds more than the limit in some state-run banks.
Irdai in June last year permitted LIC to
pick up to 51 per cent stake in the debt-ridden IDBI Bank
On January 21, IDBI Bank had received Rs 5,030 crore from LIC and on December 28, 2018, LIC had pumped in Rs 14,500 crore capital into the
bank as part of its takeover.
"That ( timeline) we will have to fix
The condition that has been put is eventually they will have to bring down (below 15 per cent)
How much time that will be, looking at their business plan and we will decide," Khuntia said.
Replying to a query, the IRDAI chief said in
exceptional cases, the regulator may allow other insurance companies to increase their stakes beyond 15 per cent.
"That will be (based) on
No bar means it is on exceptions
It is only on exceptional circumstances, if they can justify, they can be allowed," he said when asked if there is any bar on other
companies to follow the LIC-IDBI Bank model.
