The government of India maintained on Monday that insurance giant LIC’s move to bail out the troubled IDBI Bank is an acquisition, not an investment.
Government sources explained that LIC is interested in setting up a bank of its own or acquiring a public sector lender.
They also said that a strategic sale of IDBI Bank would not have realised the real asset value.
Analysts and market observers have expressed shock and displeasure over the move by the board of the Life Insurance Corporate of India to approve the proposal for a controlling stake in IDBI Bank.
The government has announced that the boards of the respective entities will take a call on the matter.
The creation of an LIC-IDBI Bank will result in an expanded network with more branches and improved geographical coverage.
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