LIC bails out IDBI Bank
The government in its zeal to address twin problem of divestments and fiscal deficit and at the same time exiting some loss making PSU which are cash guzzlers and value destroyers; comes out with an innovative idea. Here LIC becoming the core promotor of IDBI Bank is commercial decision or just mean to address above two problems only time will prove. If LIC by putting professional management team can create structure which capture capabilities of both the organization i.e. IDBI branch network and its employees and utilization huge cash generated on daily basis by LIC by grating higher returns than what LIC could make now. Nudged by the government, the insurance regulator (Insurance Regulatory and Development Authority of India) gave its approval to state-owned behemoth Life Insurance Corporation (LIC) of India to increase stake in the debt-ridden IDBI Bank from the current 10% to up to 51%. The decision has been severely criticised by several sections including empl...