Irdai allows LIC to buy up to 51% stake in debt-ridden IDBI Bank

LIC, which holds stakes in several banks, will also need the Reserve Bank of India's (RBI's) approval to own such a large stake in IDBI Bank

The Insurance Regulatory and Development Authority of India (Irdai) board on Friday approved Life Insurance Corporation’s investment in IDBI Bank, allowing LIC to own up to 51 per cent in the beleaguered lender. LIC will now be able to pump Rs 100-130 billion into IDBI Bank in tranches through a preferential allotment of new equity shares at a price determined by a formula under the Securities and Exchange Board of India’s (Sebi’s) rules. 

However, Irdai put some caveats and directed the insurer to bring down its stake in IDBI Bank over a period of five-seven years. “The regulator has asked