The government named senior banker Rakesh Sharma on Friday as managing director (MD) and chief executive officer (CEO) of IDBI Bank.
Sharma was appointed for six months or until new orders and will be tasked with ensuring a smooth transfer of majority ownership from the government to Life Insurance Corporation of India (LIC).
This occurs after the mandate of B Sriram, who was appointed executive director of IDBI Bank for three months that ended in September 2018.
“Life Insurance Corporation (LIC) is expected to continue with Sharma, given his professional background. Also, if they decide to opt for a new selection, Sharma will have a great opportunity, “said another official aware of the developments.
Earlier this week, the board of IDBI Bank approved the proposal to issue preferred shares in favor of LIC to increase the insurer’s stake in the bank up to 51%.
In a regulatory presentation, IDBI Bank said: “The board of directors of the target company (IDBI Bank) at its meeting held on October 4, 2018 has authorized the preferential allocation that represents up to 51% of the voting capital stock fully diluted (preferential issue) in favor of the acquirer (LIC) together with the acquisition control “.
LIC then left with an open offer to acquire 26% of the capital in IDBI Bank Rs 61.73 per share, a total payment of more than Rs 12,602 crore.
The bank’s board also approved an increase in the authorized capital of the bank from Rs 8,000 crore to Rs 15,000 crore.
