Insurance Regulatory and Development Authority of India on Monday said it has sought proposal from Life Insurance Corporation of India for paring its shareholding in the recently-acquired controlling stake in IDBI Bank Ltd.
The insurance regulator stipulates that insurers are allowed to hold only up to 15 percent stake in any listed entity. But LIC, with a special dispensation from IRDAI, holds more than the limit in some state-run banks.
Besides, the Reserve Bank permits a ceiling of 15 percent for promoter stake in a private sector bank.
"We will decide on the timeline (for stake reduction by LIC in IDBI Bank). We are not leaving it to them. I have asked them (LIC) to give a proposal and after that we will take a decision," IRDAI Chairman Subhash Chandra Khuntia said on the sidelines of an event organised by Ficci in New Delhi.
Last June, IRDAI permitted LIC to acquire up to 51 percent stake in the debt-ridden IDBI Bank. On Dec. 28, LIC pumped Rs 14,500 crore into the bank as part of its takeover, following which it injected another Rs 5,030 crore on Jan. 21.
As a result, LIC acquired 51 percent controlling stake in the bank, making the insurer the lender's majority shareholder.
For the third quarter ended December 2018, IDBI Bank reported widening of loss by nearly threefold to Rs 4,185.48 crore. The bank had reported a loss of Rs 1,524.31 crore in the year-ago period.
Total income fell to Rs 6,190.94 crore for the quarter, compared with Rs 7,125.20 crore in the corresponding period a year ago.
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