INSUBCONTINENT EXCLUSIVE:
By Vijay Ganeshan IyerET NOW: The Insurance Regulatory Development Authority of India (Irda), has defended the exemption given to Life
Insurance Corporation for acquiring up to 51 per cent in the state-owned IDBI Bank, saying the decision was based purely on merits of the
case.
Speaking to ET NOW, Nilesh Sathe, whole-time member of Irda, said LIC had sought an exemption to invest in the debt-ridden bank purely
as an investment and added that the state-owned insurer was given at least three such exemptions in the past.
Sathe said that LIC will bring
down its stake in IDBI Bank to less than 15 per cent over a period of time
No deadline has been set for LIC to comply with this norm as it could have put pressure on the IDBI Bank stock, he explained.
According to
Sathe, LIC is free to chart its investment strategy which is not influenced by the insurance regulator.
The board of directors of Irda
has been using money generated by selling policies to bail out government disinvestment programmes and investors are worried about the
in the near term.
As of March 31, 2018, gross NPA (non-performing assets) of IDBI Bank stood close to 28 per cent.
In absolute terms, gross
widened to Rs 5,662.76 crore as a higher provisioning for non performing asssets hurt its bottom line.
