Reserve Bank of India not in favour of changing IDBI Bank's name after takeover by Life Insurance Corporation

Change of name requires clearance from the Ministry of Corporate Affairs, shareholders, stock exchanges, among others

Press Trust of India March 18, 2019 08:07:17 IST
Reserve Bank of India not in favour of changing IDBI Bank's name after takeover by Life Insurance Corporation
  • LIC had been looking to enter the banking space by acquiring a majority stake in IDBI Bank

  • The board of IDBI Bank last month proposed a change in the name of the lender to either LIC IDBI Bank or LIC Bank

  • Change of name requires clearance from the Ministry of Corporate Affairs, shareholders, stock exchanges, among others

New Delhi: The IDBI Bank's proposal for changing its name has not found any favour from the Reserve Bank of India, sources said.

The board of IDBI Bank last month proposed a change in the name of the lender to either LIC IDBI Bank or LIC Bank, following its takeover by Life Insurance Corporation.

According to sources, the RBI is not in favour of changing the name of IDBI Bank.

The board had proposed LIC IDBI Bank Ltd as the first preference followed by LIC Bank Ltd.

Besides the RBI, change of name requires clearance from the Ministry of Corporate Affairs, shareholders, stock exchanges, among others.

Reserve Bank of India not in favour of changing IDBI Banks name after takeover by Life Insurance Corporation

An exterior view of Life Insurance Corporation of India's (LIC) headquarters seen in Mumbai. Reuters

In January, the insurance behemoth LIC completed the acquisition of 51 percent controlling stake in IDBI Bank, marking the entry of more than 60 years old state-owned insurer into the banking space.

In August last year, the Cabinet approved the acquisition of controlling stake by Life Insurance Corporation (LIC) as a promoter in the bank through a combination of preferential allotment and open offer of equity.

LIC had been looking to enter the banking space by acquiring a majority stake in IDBI Bank, as the deal is expected to provide business synergies despite the lender's stressed balance sheet.

For the third quarter ended December, 2018, IDBI Bank posted widening of loss by nearly threefold to Rs 4,185.48 crore as bad loans surged.

The bank had reported a net loss of Rs 1,524.31 crore in the corresponding quarter of the previous fiscal.

Total income decreased to Rs 6,190.94 crore for the quarter, compared to Rs 7,125.20 crore in the corresponding quarter a year ago.

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