IDBI Bank is yet to decide about its the next course of action on its stake in IDBI Federal Life Insurance as the Life Insurance Corporation (LIC) is currently in the process of completing the acquisition of the state owned lender.
Going by the current regulations,either IDBI Federal Life Insurance has to be completely merged with the LIC or sold to another company as a life insurer can’t have two licenses.
The LIC is currently awaiting final regulatory approvals for the insurance giant to acquire up to 51 percent shareholding and IDBI Bank holds 48 percent stake in the venture and Federal Bank and Belgian life insurer Ageas hold 26 percent each.
“We started the sale process in the insurance joint venture, but then the LIC deal occurred. The sale process is on hold now. We will take a decision on IDBI Federal Life Insurance in consultation with LIC once it completes its investment,” said Rakesh Sharma, Chief Executive Officer and Managing Director of IDBI Bank, in its post-results press conference.
Earlier in 2018, debt laden IDBI Bank had decided to exit IDBI Life Insurance and other life insurers like Max Life Insurance and Aditya Birla Sun Life had shown interest in taking over the company. However, the deal couldn’t go through as the IDBI Bank didn’t accept the price offered by these companies.
From April to October period, IDBI Life Insurance has mobilised Rs 355.47 crore in new premiums, down 14 percent on a year-on-year basis.
“LIC is a powerful and trusted brand among policyholders.With the LIC-IDBI Bank deal, he said it is time to rebuild the company again…The deal will help grow the market for us as well and also improve the insurance pie for us," Vighnesh Shahane, CEO & Whole-time Director, IDBI Federal Life, had said earlier to Money Control.