Ahead of LIC deal, Moody's places IDBI Bank's long-term ratings for upgrade

Currently, Moody's assumes a 'very high' level of support from the government for the bank

Rating agency Moody's has placed IDBI Bank's long-term ratings under review for upgrade following LIC's intent to acquire a 51 per cent controlling stake in the ailing public-sector lender.

The review would focus on the exact amount of fresh capital that Life Insurance Corporation of India (LIC) plans to infuse and its impact on the capital adequacy of IDBI.

The review would also consider any regulatory limitation on LIC for providing further support and raising its stake above 51 per cent, Moody's said in a statement.

Moody's will consider LIC's relatively strong credit profile, its controlling ownership and the reputational risks