Another view on the controversial plan of LIC investing in IDBI Bank could be an addition to the noise. But, one piece of statistic will make it sound like a voice. And, distinct too.
Numbers tell tales. Yes, the statement is overused. And, it’s my all-time favourite. LIC has varying stakes across 22 listed public sector banks (PSBs), and its value as on June 29, 2018, was Rs 38,050 crore. A whopping 22.7% lower compared to Rs 49,211 crore a year ago.
Rajiv Takru, department of financial services’ secretary, then was quoted to have said, “LIC, having invested equity and extended debt, is a major shareholder. It has to maintain the highest standards of corporate governance. There is no other way of doing it but by being on the board”. An Economic Times story of October 2013 further quoted Takru, “This assumes importance especially in the current stressed business environment because LIC has to look after the interest of its stakeholders.”
Also, in the 10 fiscals that the government has carried out bank recapitalisation worth Rs 202,169 crore, IDBI Bank has been recipient of Rs 21,023 crore—over seven fiscals—which accounts for 10.4% of the total recapitalisation. Yet, the bank is under the Reserve Bank of India’s prompt corrective action since May 2017, which would mean that it will be in capital hungry mode till its performance shows any improvement. source from fortuneindia