International Finance Corporation (IFC)— private sector lending arm of the World Bank has become the top contender to buy around 15 per cent in government controlled Industrial Development Bank of India (IDBI) Bank.
Sources said that talks with IFC are going on and have successfully entered final stages with negotiations having taken place at the top level. It is learnt that the World Bank arm wants a greater say in running IDBI. IDBI Bank has seen several experiments over the last two decades and has been transformed from a development financial institution-specializing in term loans-to a retail bank. The bank, however, is saddled with legacy issues, a small base of lowcost current and savings bank deposits and a weak branch network.
Earlier the Government intended to offer only around 10% to the World Bank’s wing but the new guidelines of RBI has brought cheers to IFC and opened the doors for a larger share of the pie.
Although the government was settling down to offering only around 10 per cent to IFC, the new RBI guidelines have opened the doors for a larger share of the pie. Sources said the government has also discussed the modalities of the stake sale with Sebi and plans to sell the shares above the current market price.