**Executive Summary**
This document is a statement from the Minister of Finance answering questions in Lok Sabha regarding the strategic disinvestment of IDBI Bank. The Cabinet Committee on Economic Affairs (CCEA) approved the disinvestment on May 5, 2021. The process is ongoing, with the transaction currently in the stage of due diligence by Shortlisted Bidders (SBs).
**Key Points / Main Content**
* **Disinvestment Approval:**
* CCEA approved strategic disinvestment of IDBI Bank on May 5, 2021, including transfer of management control.
* **Equity Offering:**
* 60.72% of IDBI Bank's equity is offered for strategic disinvestment.
* Government of India (GoI) is offering 30.48% (post-sale residual equity to be 15%).
* Life Insurance Corporation of India (LIC) is offering 30.24% (post-sale residual equity to be 19%).
* **Bidding Process:**
* The Preliminary Information Memorandum (PIM) was published on October 7, 2022, inviting Expression of Interest (Eol).
* Multiple EOIs were received and sent to the Ministry of Home Affairs (MHA) for security clearance and the Reserve Bank of India (RBI) for 'fit and proper' assessment.
* The transaction is currently in the stage of due diligence by Shortlisted Bidders (SBs).
* **Confidentiality:**
* The identity of bidders cannot be disclosed before the completion of the transaction.
* **Proceeds and Employee Concerns:**
* Realisation of proceeds by GoI and LIC is dependent on the bid received and is currently unknown.
* Employee and stakeholder concerns will be addressed through provisions in the Share Purchase Agreement (SPA).
**Impact Analysis**
**Government of India (GoI)**
* **Impact:** Reduced stake in IDBI Bank, potential revenue generation from the sale.
* **Action Required:** Await bid outcome, finalise and execute the Share Purchase Agreement (SPA).
**Life Insurance Corporation of India (LIC)**
* **Impact:** Reduced stake in IDBI Bank, potential revenue generation from the sale.
* **Action Required:** Await bid outcome, participate in finalising and executing the Share Purchase Agreement (SPA).
**IDBI Bank Employees**
* **Impact:** Potential changes in management and working conditions.
* **Action Required:** Await details within the Share Purchase Agreement (SPA) regarding employee protections and transition plans.
**Shortlisted Bidders (SBs)**
* **Impact:** Potential acquisition of a significant stake in IDBI Bank and control of its management.
* **Action Required:** Perform due diligence, submit bids, and negotiate the Share Purchase Agreement (SPA).
Key Entities Referenced
Strategic Disinvestment of IDBI Bank: The central topic is the strategic disinvestment, involving transfer of management control, of IDBI Bank.
IDBI Bank: The Industrial Development Bank of India, the subject of the strategic disinvestment.
Cabinet Committee on Economic Affairs (CCEA): The committee that approved the strategic disinvestment of IDBI Bank.
Life Insurance Corporation of India (LIC): LIC is involved in the disinvestment, offering part of its stake.
Reserve Bank of India (RBI): The RBI assesses potential bidders for 'fit and proper' status in the disinvestment process.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF INVESTMENT AND PUBLIC ASSET MANAGEMENT
(DIPAM)
LOK SABHA
STARRED QUESTION NO. *17
TO BE ANSWERED ON MONDAY, DECEMBER 01, 2025
AGRAHAYANA 10, 1947 (SAKA)
STRATEGIC DISINVESTMENT OF IDBI BANK
*17. Shri Chavan Ravindra Vasantrao, Shri Sudheer Gupta
Will the Minister of FINANCE be pleased to state:
(a) whether the Government has any proposal/plans for strategic disinvestment in IDBI
Bank;
(b) if so, the details thereof along with the time by which the process of strategic
disinvestment in IDBI Bank is likely to be completed;
(c) whether any foreign bank/financial institution has shown interest in acquiring the IDBI
Bank and if so, the details thereof;
(d) the quantum of revenue likely to be generated/earned by the Government and Life
Insurance Corporation of India through this strategic disinvestment of IDBI Bank; and
(e) whether the Government has consulted Unions and Associations of IDBI Bank
employees to address their concerns about the proposed disinvestment of IDBI Bank and if
so, the details thereof?
ANSWER
THE MINISTER OF FINANCE
(SMT. NIRMALA SITHARAMAN)
(a) to (e) A statement is laid on the Table of the House.
******STATEMENT REFERRED TO IN REPLY TO PARTS (a) to (e) OF LOK SABHA STARRED
QUESTION NO.*17 TO BE ANSWERED ON 01st DECEMBER,2025, REGARDING
‘STRATEGIC DISINVESTMENT OF IDBI BANK’
(a) and (b) The Cabinet Committee on Economic Affairs (CCEA) in its meeting on
05.05.2021 has given 'in principle' approval for the strategic disinvestment along with
transfer of management control in IDBI Bank Ltd. of such extent of shareholding in
Government of India and LIC as may be decided in consultation with LIC and within the
framework agreed to by the Reserve Bank of India (RBI).
Pursuant to the CCEA’s (Cabinet Committee on Economic Affairs) approval in May 2021 for
strategic disinvestment along with transfer of management control in IDBI Bank Ltd, 60.72%
of IDBI Bank’s equity is being offered for strategic disinvestment with transfer of
management control, wherein GoI is offering 30.48% (post sale GOI’s residual equity to be
15%) and Life Insurance Corporation of India (LIC) is offering 30.24% equity for
disinvestment (post sale LIC’s residual equity to be 19%).
The Preliminary Information Memorandum (PIM) for inviting Expression of Interest (EoI)
from potential bidders was published on 7th October, 2022. In response to the PIM, multiple
Expressions of Interest (EOIs) were received. These EOIs were sent to Ministry of Home
Affairs (MHA) for Security clearance and the Reserve Bank of India (RBI) for ‘fit and proper’
assessment. After security clearance from MHA and fit and proper evaluation by RBI, the
transaction is currently in the stage of due diligence by Shortlisted Bidders (SBs).
(c) As per the extant process, the identity of bidders cannot be disclosed before completion
of the transaction.
(d)& (e) The realisation of proceeds by the GoI and LIC is a function of the bid received and
is therefore not known at the moment. While deciding the terms and conditions of the
strategic sale, legitimate concerns of the existing employees and other stakeholders are
suitably addressed through appropriate provisions made in the Share Purchase Agreement
(SPA).
******