The Insurance Regulatory and Development Authority of India today said it will set the timeline to reduce LIC’s shareholding in IDBI Bank from 51 per cent to 15 per cent.
Speaking to the reporters on the sidelines at an Insurance summit organised by Assocham in Mumbai today, IRDAI chairman S C Khuntia said this move will take place only after looking at LIC’s business plan post-acquisition of 51 per cent in debt-ridden IDBI Bank.
LIC holds 7.98 % in IDBI bank and is in process of increasing its stake to 51 %, which would help it enter the banking space.
Currently, the permissible limit for insurance companies to hold stake in any listed entity is 15 %.
When asked whether IRDAI has responded to the court against the petition filed by the IDBI employees, Khuntia said, We have responded to the court.
IRDAI has the powers to give relaxations in specific cases if they are justified. He further said All India IDBI Officers Association had challenged the LIC’s move to acquire 51 per cent stake in IDBI Bank in the Delhi High Court. It had sought withdrawal of the approval given by the IRDAI to the transaction.
Meanwhile, talking about the government’s flagship national health insurance scheme, Ayushman Bharat, Khuntia said the insurance model will be more effective as the oversight in the model is better than the trust model.