LIC's investment in IDBI Bank depends on the latter's ability to turn its business around, else the policyholders are likely to take a hit
Through special permission from the Insurance Regulatory and Development Authority of India (IRDAI), the Life Insurance Corp. of India (LIC) has been allowed to pick an estimated, additional 43% stake in IDBI Bank Ltd that will make LIC the largest shareholder of the bank. This made headlines for two reasons: the move is seen as LIC rescuing the government yet again in its disinvestment programme, and the fact that LIC has chosen to pick up one of the worst performing banks with policyholders’ money is seen as a bad investment choice with the insurance regulator’s blessing.
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