Bank Deal: For the past several days, the government was planning to privatize IDBI Bank. But now this planning is going to be completed soon. According to many media reports, Indian-origin billionaire Prem Vats may soon become the official owner of this bank. Because he has put the biggest proposal before the government to buy this bank.

The company put forward the proposal
In fact, Fairfax Financial Holdings, the company of Indian-origin Canadian billionaire Prem Vats, is showing great interest in buying IDBI. The company has made a proposal of 5.5 billion to 5.7 billion dollars (about Rs 47,000-49,000 crore) to buy the bank.

This will be one of the largest foreign investments ever in India’s banking sector. However, the government has not yet taken a final decision on this and this proposal is currently being considered.

Also read: Moldy Juice: Breaks fast by drinking moldy juice, court imposes fine of Rs 70,000 on Dabur, read the case

Why is the bank being destroyed?
IDBI is a private sector bank in which 60.7% stake is held by the government and LIC. Which they want to sell. At present the government holds about 45.5% stake in the bank and LIC holds 49.2% stake. This decision is being taken because a few years ago IDBI Bank was struggling with bad loans (NPA) and weak financial condition. In 2018, RBI had also placed the bank in the Prompt Corrective Action (PCA) framework.

However, now the bank has reduced bad loans, increased profits and improved its financial position. Because of which global investors are ready to invest in it. Two companies Fairfax Financial Holdings and Dubai’s Emirates NBD have placed stakes for the bank.

What will be the impact on customers?
Even if Fairfax buys the bank’s stake, there will be no immediate major change for common customers. Bank branches, deposits, loans and other banking services will continue as before. At present, the government is reviewing the bids of both the companies and a decision on this deal will be taken only after getting the final approval.

Also read: China: Factories closed, buyers missing, China reached its worst phase in 3 years, lagging behind India in GDP!

RBL Bank News: A big deal is going to happen between private sector bank RBL and Emirates NBD Bank in the country. UAE lender is going to buy 60 percent stake in RBL. This deal will be for about 3 billion dollars (about Rs 26,850 crore). This is considered to be the biggest deal so far in the private sector banking of the country. The boards of RBL Bank and Emirates NBD approved this deal at their respective levels on Saturday.

This investment, made through preferential allotment of up to 60 percent, is subject to the approval of the Reserve Bank of India (RBI), shareholders and other regulatory bodies. Under SEBI’s takeover regulations, Emirates will also make an open offer to acquire up to 26 per cent stake from public shareholders. As per RBI guidelines, once the preferential issue is completed, Emirates will become the promoter of RBL and will also gain control over it.

This deal is considered to be one of the largest foreign investments made so far in the country’s banking sector. Emirates NBD said that this investment reflects their long term commitment towards India. It reflects India’s growing importance within the India-Middle East-Europe Economic Corridor (IMEC) and strengthens the India-UAE comprehensive economic partnership.

Also read:

Problems increased due to RBI’s new check clearing system! It’s taking 10 to 12 days instead of the same day.