The government is not considering any proposal for strategic stake sale of state-owned IDBI Bank, Parliament was informed on Tuesday.
In a written reply to the Rajya Sabha, Minister of State for Finance Santosh Gangwar answered "no" to a question asking whether the government was proposing strategic sale of IDBI Bank.
Finance Minister Arun Jaitley had in his Budget speech for 2016-17 said, "The process of transformation of IDBI Bank has already started. The government will take it forward and also consider the option of reducing its stake to below 50 per cent."
The government holds 74 per cent stake in IDBI Bank.
Gangwar also said public sector banks, including IDBI, have been allowed to raise capital through follow-on public offer or qualified institutional placements. This could result in dilution of "government holding up to 52 per cent in a phased manner based on their (public sector banks') capital requirement, their stock performance, liquidity, market conditions, etc".
According to reports, Asian Development Bank, International Finance Corporation and other investors were in talks to get a share of IDBI Bank's Rs 3,771-crore stake sale via qualified institutional placements.
A section of officers and employees of IDBI Bank went on a strike a couple of months ago to protest against the government's plan to reduce its stake to below 52 per cent, as announced by Jaitley. The bank has around 17,500 employees.
