Here's why India's life-saving plan for IDBI Bank makes no sense

It's hard to see how the transaction could bolster the reputation of any of India's three financial regulators

Rescuing a dying bank with taxpayers' money is often the only way to prevent a costlier contagion. But nursing a deposit-taking institution by tapping life-insurance premiums of policyholders? That's like allowing a localized infection to spread all over, hoping the natural immunity of an otherwise healthy body will help beat back the germs.

India's plan to sell a majority stake in IDBI Bank Ltd to Life Insurance Corp of India is not modern medicine. It's bureaucratic quackery. New Delhi hasn't found a genuine private-sector buyer for the ailing IDBI for more than two years. Hence, the stage is being cleared for