As the employee unions oppose stake sale in IDBI Bank, the Government on Friday said it is consulting all stakeholders as part of "transformation" of the state-owned lender.
New Delhi: As the employee unions oppose stake sale in IDBI Bank, the Government on Friday said it is consulting all stakeholders as part of "transformation" of the state-owned lender.
The government had in December approved IDBI Bank selling stake to institutional investors, a move opposed by its employees unions. Government owns 80.2 per cent of the bank.
"The IDBI transformation process is under way. And we are in the midst of working through that process. The consultation process is underway and that requires that we talk all stakeholders," Minister of State for Finance Jayant Sinha told reporters here.
IDBI Bank is seeking to bolster its balance sheet after recording bad debts that totaled 8.94 per cent of its loans in the third quarter ended December 31, 2015.
It has appointed advisers including Bank of America Corp, Citigroup Inc and Credit Suisse Group AG for the Rs 3,770 crore share sale.
The government is looking at transforming IDBI Bank on the lines of Axis Bank. Unlike the restriction of the minimum government holding of 51 per cent in most PSU banks as mandated in the Banking Regulation Act, the government is not bound to retain a majority stake in IDBI Bank.
On consolidation in the banking sector, Sinha said, "We are looking at where the banks will be post fourth quarter and the end of the financial year in terms of balance sheet and capital requirements. Once that phase is complete and we understand where each bank is positioned, then we will move forward on other initiatives."