Cabinet okays 51% stake for LIC in IDBI

The Union Cabinet on Wednesday gave its approval to the government’s decision to reduce its stake in IDBI Bank below 50%, with Life Insurance Corporation raising stake in the bank to 51%.

The boards of IDBI Bank and LIC have both given their approval for the deal.

“The Union Cabinet has approved conveying of no objection to reduction in Government of India shareholding in IDBI Bank Limited to below 50% by dilution,” the government said in a release.

“It has also approved acquisition of controlling stake by Life Insurance Corporation of India (LIC) as promoter in the bank through preferential allotment / open offer of equity, and relinquishment of management control by the government in the bank.”

‘Old contracts to benefit’

In a separate decision, the Cabinet approved the extension of the unified licensing policy — which allows developers of a hydrocarbon block to extract and market all types of hydrocarbons (crude oil, natural gas, coal bed methane, shale oil, shale gas) available in the block — to older contracts in which this provision was not available.

“This policy will enable the realisation of prospective hydrocarbon reserves in existing contract areas which otherwise would remain unexplored and unexploited,” the government said.

“With this policy dispensation, new investment in exploration and production (E&P) activities and chances of finding new hydrocarbon discoveries and resultant increased domestic production thereof is expected.”

‘Interest-free loans’

The Cabinet Committee on Economic Affairs also approved the proposal of the Department of Fertilizers to grant interest-free loans (IFL) of Rs. 422.28 crore, Rs. 415.77 crore and Rs. 419.77 crore for fertiliser units being revived at Gorakhpur, Sindri and Barauni.

The committee also gave its approval for the issue of fresh 13,87,82,700 equity shares in Hindustan Copper to the extent of 15% of paid up equity capital in order to reduce its shareholding in the company to 66.13% from the current 76.05%.

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