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The government can realise better value from the proposed disinvestment of its stake in IDBI Bank once the bank comes out of prompt corrective action (PCA), according to Rakesh Sharma, MD and CEO, IDBI Bank.
The Reserve Bank of India (RBI) placed IDBI Bank under PCA, entailing restriction on lending and expansion of operations, among others, about three years back, so that it takes remedial measures to regain health.
“The government should divest its stake in IDBI Bank after it comes out of prompt corrective action (PCA),” said Sharma, replying to a specific question on whether the government should divest its stake after the bank comes out of PCA.
The government has 45.48 per cent stake in IDBI Bank. Life Insurance Corporation of India (LIC) holds 49.24 per cent stake.
Ajay Sharma, ED and CFO, said: “On PCA, we have complied with most of the indicators…only on the profitability criteria, where RoA (return on asset) should be positive, we have to look at the year-end number.
“And, hopefully, when the bank will declare next quarter result, we should be compliant on that also. And we are looking forward to PCA exit sooner.”
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