The Reserve Bank of India (RBI) is expected to fast-track the vetting of potential buyers for IDBI Bank, helping the government sell a majority stake in the bank by October-end.
The government, which owns 45.48% of IDBI Bank, and state-owned Life Insurance Corp of India, which holds 49.24%, plan to sell 60.7% of the lender.
The RBI began the vetting process in April after Kotak Mahindra Bank, Prem Watsa-backed CSB Bank, and Emirates NBD submitted initial bids to acquire a majority stake in IDBI Bank. The RBI typically takes 12-18 months to complete the assessment, but has conveyed to the government that it will complete the vetting of IDBI Bank’s potential buyers by October-end.
Completing the vetting process early could allow the government to invite bids in January-March and target a wrap-up of the sale by the end of March.
The IDBI Bank stake sale is part of the government’s 510 billion rupees ($6.13 billion) divestment target for fiscal 2024. However, it is also the only significant divestment the government is focusing on this year, raising concerns about the target being met, as attention turns to the upcoming state and national elections.
Once the RBI screening concludes, the government will grant suitable bidders access to confidential data that IDBI Bank has begun collecting, such as employees’ pension corpus and insurance or medical covers.
