IDBI Bank has been categorised as a private sector lender following acquisition of majority stake by Life Insurance Corporation, the Reserve Bank of India said.
In January, LIC completed the process of picking up a controlling 51 percent stake in IDBI Bank.
IDBI Bank has been categorised as a ‘private sector bank' for regulatory purposes by RBI with effect from Jan. 21, 2019 consequent upon LIC acquiring 51 percent of the total paid-up equity share capital of the bank.Reserve Bank of India statement
IDBI Bank has been under the prompt corrective action framework of RBI that bans it from corporate lending and branch expansions, salary hikes and other regular activities.
However, the lender has charted out a revival strategy to bring banking and insurance under one roof, along with its new owner LIC.
Last week, IDBI Bank informed about appointment of LIC as a corporate agent under bancassurance channel.
In the long term, the bank and LIC will have a common investment strategy, use each other's resources like real estate, commercial and residential space, bank branches, premises and ATMs and digital marketing, among others, the bank had said.
Both entities will also undertake rationalisation of the common subsidiaries in mutual funds and life insurance arms, as per the strategic plan.
For December quarter of this fiscal, IDBI Bank's loss widened to Rs 4,185.48 crore as bad loans surged.
The bank's gross non-performing assets shot up to 29.67 percent of gross advances as at Dec. 31, 2018 against 24.72 percent a year ago.
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