/IDBI Bank stock up as RBI classifies it as a private lender

IDBI Bank stock up as RBI classifies it as a private lender

NEW DELHI: IDBI Bank shares were trading with a gain of over 1 per cent in morning trade on Friday even as the Reserve bank of India classified IDBI Bank as a private lender after LIC took control of it.

“IDBI Bank has been categorised as a pPrivate sector bank’ for regulatory purposes by RBI with effect from January 21, 2019, consequent upon Life Insurance Corporation of India acquiring 51 per cent of the total paid-up equity share capital of the bank,” RBI said on Thursday.

Analysts say the move might lead to a rating downgrade and a rise in the cost of funding as investors would factor in the absence of sovereign backing for the bank.

Around 9:50 am, shares of the company traded 1.04 per cent up at Rs 43.55.

Meanwhile, rating agency ICRA on Thursday revised outlook of six banks including IDBI Bank, Bank of India, Punjab National Bank, Oriental Bank of Commerce, Bank of Maharashtra and Punjab & Sindh Bank.

ICRA has assigned a negative outlook to IDBI Bank and removed rating watch with developing implications.

The outlook will be revised to stable when the bank is able to raise capital, commensurate with its requirements, that will support the improvement of its solvency ratios, reduction of net NPAs and maintenance of the capital ratios (including CCBs), ICRA said.

Let’s block ads! (Why?)

Markets-Economic Times