{"id":314847,"date":"2019-09-03T11:00:59","date_gmt":"2019-09-03T11:00:59","guid":{"rendered":"http:\/\/tehelka.com\/?p=314847"},"modified":"2019-09-03T11:00:59","modified_gmt":"2019-09-03T11:00:59","slug":"cabinet-approves-infusion-of-capital-in-idbi-bank","status":"publish","type":"post","link":"https:\/\/tehelka.com\/cabinet-approves-infusion-of-capital-in-idbi-bank\/","title":{"rendered":"Cabinet approves Infusion of capital in IDBI Bank"},"content":{"rendered":"<p style=\"text-align: justify;\"><span style=\"font-family: 'times new roman', times, serif; font-size: 14pt;\"><img decoding=\"async\" loading=\"lazy\" class=\"size-full wp-image-314848 aligncenter\" src=\"http:\/\/tehelka.com\/wp-content\/uploads\/2019\/09\/IDBI-Bank.jpg\" alt=\"\" width=\"530\" height=\"432\" srcset=\"https:\/\/tehelka.com\/media\/2019\/09\/IDBI-Bank.jpg 530w, https:\/\/tehelka.com\/media\/2019\/09\/IDBI-Bank-300x245.jpg 300w, https:\/\/tehelka.com\/media\/2019\/09\/IDBI-Bank-515x420.jpg 515w\" sizes=\"(max-width: 530px) 100vw, 530px\" \/><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: 'times new roman', times, serif; font-size: 14pt;\">The Union Cabinet chaired by Prime Minister Narendra Modi on Tuesday approved the Infusion of Rs 4,557 crore by Government in IDBI Bank.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: 'times new roman', times, serif; font-size: 14pt;\">It will help in completing the process of IDBI Bank\u2019s turnaround and enable it to return to profitability and normal lending and giving Government the option of recovering its investment at an opportune time.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: 'times new roman', times, serif; font-size: 14pt;\">IDBI Bank needs a one time infusion of capital to complete the exercise of dealing with its legacy book. It has already substantially cleaned up, reducing net NPA from peak of 18.8% in June 2018 to 8% in June 2019. The capital for this has to come from its shareholders. LIC is at 51% and is not allowed to go higher by the insurance regulator. Of the Rs. 9,300 crore needed, LIC would meet 51% (Rs. 4,743 crore). Remaining 49%, amounting to Rs. 4,557 crore, is proposed from Government as its share on one time basis.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: 'times new roman', times, serif; font-size: 14pt;\">After this infusion, IDBI Bank expects to be able to subsequently raise further capital on its own and expects to come out of RBI\u2019s Prompt Corrective Action (PCA) framework sometime next year. This cash neutral infusion will be through recap bonds i.e. Government infusing capital into the bank and the bank buying the recap bond from the Government the same day, with no impact on liquidity or current year\u2019s Budget.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Union Cabinet chaired by Prime Minister Narendra Modi on Tuesday approved the Infusion of Rs 4,557 crore by Government in IDBI Bank. It will help in completing the process of IDBI Bank\u2019s turnaround and enable it to return to profitability and normal lending and giving Government the option of recovering its investment at an [&hellip;]<\/p>\n","protected":false},"author":59,"featured_media":314848,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[36],"tags":[168,1990],"_links":{"self":[{"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/posts\/314847"}],"collection":[{"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/comments?post=314847"}],"version-history":[{"count":1,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/posts\/314847\/revisions"}],"predecessor-version":[{"id":314849,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/posts\/314847\/revisions\/314849"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/media\/314848"}],"wp:attachment":[{"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/media?parent=314847"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/categories?post=314847"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/tags?post=314847"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}