Bank Privatisation: Government May Finalize the Deal by End of March, Know the Reason Behind It

IDBI Bank Privatisation: The long-awaited privatisation of IDBI Bank is likely to be completed by the end of this month. The central government has set a clear target to finalize the disinvestment process within the first half of the upcoming financial year. Meanwhile, IDBI Bank's shares witnessed a decline of over 2% on Tuesday, hitting an intraday low of Rs 71.54.

IDBI Bank's Privatisation May Conclude This Month

A major update has surfaced regarding the privatisation of IDBI Bank. According to a recent media report, the process of disinvestment for IDBI Bank is expected to be completed by March 2025. Sources from CNBC TC18 have revealed that the central government has aimed to finalize the transaction by the first half of the next financial year. Additionally, the government is likely to invite financial bids soon to complete the transaction.

On Tuesday, the bank's shares dropped significantly, hitting an intraday low of Rs 71.54. This downward trend is attributed to ongoing discussions about the bank's privatisation.

What Is the Current Progress of the Privatisation?

According to government sources quoted by CNBC TC18, the process of IDBI Bank’s privatisation is progressing smoothly, and the deal is anticipated to conclude in March 2025. The government has already cleared several concerns related to the data room, making way for the next phase of the privatisation process.

A senior government official also confirmed that the financial bidding process will commence soon. The same was reported by Business Today TV, stating that the government has now addressed all major concerns related to the disinvestment process. This development has increased the possibility of completing the IDBI Bank transaction by the end of this month.

Government and LIC to Transfer Their Stake

As per the privatisation plan, the central government is set to sell its 30.48% stake in IDBI Bank, while Life Insurance Corporation (LIC) will offload 30.24% of its shares. In addition to the stake sale, the transfer of management control will also be a part of the deal. This strategic move is expected to boost the operational efficiency of the bank.

A top government official confirmed that the Department of Investment and Public Asset Management (DIPAM) has ensured that all regulatory and operational concerns have been addressed. The financial bidding process is expected to begin shortly, marking the final phase of IDBI Bank's privatisation.

What Will Be the Impact of Privatisation?

The privatisation of IDBI Bank is anticipated to bring a significant transformation in the banking sector. With a private entity taking over, the bank is expected to operate with improved efficiency, enhanced customer service, and robust financial management. Moreover, it will also reduce the government’s direct involvement in the banking sector, aligning with its long-term disinvestment goals.

The exact date of privatisation has not been officially confirmed yet, but sources suggest that the deal may be finalized before the end of March 2025. Investors and stakeholders are keenly observing the developments, as this major transition is expected to significantly influence IDBI Bank's future prospects.