IDBI Bank has announced that insurance behemoth Life Insurance Corporation has completed acquisition of 51 per cent controlling stake in the bank, making it the lender’s majority shareholder. In August 2018, the Cabinet approved the acquisition of controlling stake by LIC as a promoter in the bank through a combination of preferential allotment and open offer of equity. LIC had been looking to enter the banking space by acquiring a majority stake in IDBI Bank, as the deal is expected to provide business synergies despite the lender’s stressed balance sheet.
IDBI Bank has about 1.5 crore retail cusomers and about 18,000 employees. With this deal, LIC will have a strategic investment in a large bancassurance channel, thereby increasing its productivity and reducing distribution costs. The bank’s board also approved the appointment of Rajesh Kandwal as an additional director and LIC’s nominee director on the board of IDBI Bank.
- IDBI Bank (Industrial Development Bank of India) was established in 1964 by an Act of Parliament to provide credit and other financial facilities for the development of the fledgling Indian industry.
- In 1976, the ownership of IDBI was transferred to the Government of India and it was made the principal financial institution for coordinating the activities of institutions engaged in financing, promoting and developing industry in India.
- Headquarters: Mumbai.
- The Life Insurance Corporation of India was founded in 1956 when the Parliament of India passed the Life Insurance of India Act that nationalised the private insurance industry in India. Over 245 insurance companies and provident societies were merged to create the state owned Life Insurance Corporation.
- LIC’s slogan yogakshemam vahaamyaham is in Sanskrit which loosely translates into English as “Your welfare is our responsibility”.