RBI granted 12 years to LIC for reducing stake in IDBI Bank

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Life Insurance Corporation(LIC), the largest insurance company in India, got 12 years from RBI for cut down stake in IDBI Bank.LIC is the lender’s major shareholder, and it has a 51 per cent stake in the Bank. It means that no obligation to sell its stake in the following years or would probably spend higher money to keep its stake in any future fund raising by the bank.

Insurance Regulatory and Development Authority (IRDAI) claimed that LIC can take up to 15 percent stake in any bank,which can stretch up to 30 percent as per the board approval.But the insurance regulator has authorised LIC to hold up to 51 percent in IDBI Bank in 2018.

After 12 years LIC has to decrease stake in IDBI Bank by 10 per cent to 40 per cent.