Government decided to bring down its holding in IDBI Bank to 49%

• The government has decided to bring down its holding in IDBI Bank to 49 per cent, in line with its commitment to reform state-run banks all over the country.
• This is mainly because IDBI Bank is saddled with Non-Performing Assets (NPAs)like most other state-run banks. At a gross level, the bank’s NPAs stood at 9 per cent of advances at the end of June 2015.
• The government will follow the model of Axis Bank, India’s third-largest by market capitalisation, where the government owns and indirectly controls 19 per cent stake through 100 per cent owned Specified Undertaking of UTI but has no role in day-to-day operations.
• Point to be noted that unlike other state-run banks, IDBI Bank is governed by aseparate law, the IDBI Act. While in the case of other state-run banks, the government has said it will not bring its stake to below 52 per cent, in the case of IDBI Bank there is no such restriction. So in this case the government can bring down its stake to 49 per cent without having to approach the Parliament.