New Delhi: Insurance Regulatory and Development Authority of India (IRDAI) has sought a proposal from Life Insurance Corporation of India (LIC) for paring its shareholding in the recently acquired controlling stake in IDBI Bank Ltd, the insurance regulator said on Monday.
IRDAI stipulates that insurers are allowed to hold only up to 15% stake in any listed entity. But LIC, with a special dispensation from IRDAI, holds more than the limit in some state-run banks. Besides, the Reserve Bank of India (RBI) permits a ceiling of 15% for promoter stake in a private sector bank.
"We will decide on the timeline (for stake reduction by LIC in IDBI Bank). We are not leaving it to them. I have asked them (LIC) to give a proposal and after that we will take a decision," IRDAI chairman Subhash Chandra Khuntia said on the sidelines of an event organised by FICCI here.
In June 2018, IRDAI permitted LIC to acquire up to 51% stake in debt-ridden IDBI Bank. On 28 December, LIC pumped ₹14,500 crore into the bank as part of its takeover, following which it injected another ₹5,030 crore on 21 January.
As a result, LIC acquired 51% controlling stake in IDBI Bank, making the insurer the lender's majority shareholder.
For the third quarter ended December 2018, IDBI Bank reported widening of loss by nearly threefold to ₹4,185.48 crore. The bank had reported a loss of ₹1,524.31 crore in the year-ago period. Total income fell to ₹6,190.94 crore for the quarter, compared to ₹7,125.20 crore in the corresponding period a year ago.
With regard to exposure of the insurance firm to debt-ridden IL&FS Group, Khuntia said IRDAI will ensure that policyholders do not lose money.
"Either they get it back fully or they will have to provide for it. Some of the IL&FS companies may be better off. We will find some ways so that policyholders are protected," he said.
Speaking at the event, Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) and National Health Authority CEO Indu Bhushan said Ayushman Bharat has benefited 15 lakh people since its launch in September. In 170 days, about ₹2,000 crore has been spent on providing free health treatment to beneficiaries, he said.