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Business News/ Market / Stock-market-news/  IDBI shares climb 17% on Jaitley comments
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IDBI shares climb 17% on Jaitley comments

Finance minister Arun Jaitley suggested over the weekend that the government may allow the lender to follow a model similar to that of Axis Bank

In intra-day trade, shares of IDBI Bank jumped 10.4%, their steepest gains since 3 March. Photo: Pradeep Gaur/MintPremium
In intra-day trade, shares of IDBI Bank jumped 10.4%, their steepest gains since 3 March. Photo: Pradeep Gaur/Mint

Mumbai: Shares of IDBI Bank Ltd rallied almost 17% on Monday after finance minister Arun Jaitley suggested over the weekend that the government may allow the lender to follow a model similar to that of Axis Bank Ltd.

In an interview with CNBC-TV18, Jaitley cited the example of Axis Bank while commenting on ways to give government-owned banks greater operational freedom.

“Take Axis Bank for instance, and that is the model where, through various government instrumentalities, there’s a major shareholding that the government has, but the government maintains an arm’s length distance and it is a bank which has done remarkably well. Therefore, can we, with regard to any other institution that we have, like IDBI, follow that model?" said Jaitley.

While the government is the majority shareholder in IDBI Bank, with a holding of 76%, IDBI is not strictly considered a nationalized bank.

IDBI was formed as a development finance institution and later converted into a bank in 2004. This was done through a separate act, Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003.

IDBI Bank shares rose 16.72% on the BSE to end the day at 69.45, while the Sensex fell 0.1% to 26,192.98 points.

Also on Monday, infrastructure financing firm IDFC Ltd fixed 5 October as record date for share transfer as part of its demerger scheme.

PTI contributed to this story.

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Published: 21 Sep 2015, 12:06 PM IST
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