Keep an eye on IDBI Bank as Centre to allow foreign funds to own over 51% in IDBI Bank

The Indian government will permit a consortium of foreign funds and investment firms to claim over 51% in IDBI Bank Ltd (IDBI.NS), as per a government clarification on Tuesday.

The ongoing rules of the Reserve Bank of India confine foreign proprietorship in new private banks. The central bank's residency standards for advertisers applies just for recently set up banks and wouldn't make a difference to a current element like IDBI Bank, the Department of Investment and Public Asset Management said in a reaction to interested bidders' questions.

"The residency models wouldn't have any significant bearing to a consortium comprising of funds investment vehicle incorporated external India," it said.

The Indian government and the RBI would likewise consider loosening up the five-year secure in period for shares in the event that a non-banking financial company is converged into IDBI Bank, it said.

The clarifications come in front of a Dec. 16 cutoff time to submit articulations of interest for a larger part stake in IDBI Bank, one of only a handful of exceptional lenders that the government is attempting to offload its stake in.The government and Life Insurance Corporation of India together hold 94.71% in IDBI Bank and are hoping to sell 60.72%.