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On the day when country's stock markets bleed profuriously, stocks of IDBI Bank jumped over 10 per cent on the Centre's plan to sell its remaining stake in the lender to private, retail and institutional investors.
The proposal made by Finance Minister Nirmala Sitharaman in the Union Budget 2020-21, presented to the Parliament on Saturday, boosted the bank's scrip on the BSE.
The stock jumped by 10.03 per cent or Rs 3.40 to Rs 37.30 from its previous close.
The government, a promoter, holds around 46.5 per cent stake in IDBI Bank, classified as a private bank following LIC's acquisition.
In September, Life Insurance Corporation (LIC) of India and the government together infused Rs 9,300 crore as equity capital into the bank.
State-owned LIC, which is the promoter of the debt-ridden lender with 51 per cent stake, will pump in an additional Rs 4,743 crore to improve the bank's capital position.
Sitharaman said: "In the last few years, the government has taken concrete steps to bring our banking system to be robust. However, there is a need for greater private capital."
"Accordingly, it is proposed to sell the balance holding of government of India in IDBI Bank to private, retail and institutional investors through the stock exchange."
She further said that there is a need to take further steps to bring in transparency and greater professionalism in Public Sector Banks. The government will take appropriate measures, she said.