Sebi knew the reclassification of LIC as a public shareholder in Idbi Bank in the midst of the rejection plan

Idbi Bank said that Regulator of the Sebi capital markets has approved the reclassification of Life Insurance Corporation (LIC) as a “public shareholder” in the lender once the strategic disinvestment process of the government is completed.

In an exchange application, the bank stated that SEBI goods inspection is subject to several conditions, including LIC who covers its voting rights at 10%, do not inspect the affairs of the bank, and who enjoys special rights, formally or informal.

LIC will also not be represented in the board of Idbi Bank, nor act as an important management person.

The supervisor has further aimed that LIC must lower its remaining interest in Idbi Bank to 15% or lower within two years after the completion of the divestment, according to the reserve Bank of India guidelines.

The reclassification also requires that the IDBI Bank applies the necessary requests for trade fairs as soon as the transaction is closed.

Sebi has clarified that any infringement of the conditions will automatically destroy the approval of the reclassification. The step is part of the strategic disinvestment plan for Idbi Bank, approved by the Cabinet Committee for Economic Affairs in May 2021, including the government and LIC jointly unload their interests. Compared to RS 1,719 Crore posted in the period of a year ago. The lender recorded a net interest income (NII) of RS 3,166 Crore in Q1 FY26, which was 2% lower.

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