Govt to rethink IDFC rejig move

RBIs transfer of 15% stake to SBI may be rolled back

In yet another twist to the restructuring of the Infrastructure Development Finance Company (IDFC), the finance ministry will revisit the decision of transferring the Reserve Bank of India's 15 per cent stake in the company to the State Bank of India (SBI).

The proposal would be put up before the new finance minister, officials told Business Standard. The government had initially proposed to turn IDFC into a subsidiary of SBI or merge it with the commercial bank.

It, however, decided to modify its plan and transferred RBI's stake in the company to SBI, which already holds 6 per cent stake, following protests by the company's top management.

The central bank intended to exit from the infrastructure finance company and confine its role to that of a regulator. Some foreign stakeholders in the company had also expressed reservations on the proposal.

Officials said the foreign stakeholders had been convinced of the plan since IDFC's stakeholding pattern would not change following the proposed transfer to SBI.

An amendment in the shareholder's agreement will, however, be required for the purpose. Under the present shareholders' agreement, the sponsor group comprising the government (20 per cent), RBI (15 per cent) and the Industrial Development Bank of India (5 per cent) are mandated to hold 40 per cent stake at any point of time.

Another 40 per cent is held by foreign shareholders, while the rest is contributed by Indian banks and institutions, including SBI, ICICI Bank, UTI, HDFC and IFCI Ltd.

The officials also said the selection committee for IDFC, which is looking for a replacement for Nasser Munjee who resigned following the government move to restructure the stakeholding pattern, had decided to rope in headhunters to do the job.

The headhunters are in consultations with some candidates and is shortlisting names for the selection committee.