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IDBI Bank

Industrial Development Bank of India (IDBI

Bank Limited or IDBI Bank or IDBI) was
established in 1964 by an Act to provide
credit and other financial facilities for the
development of the fledgling Indian
industry. Initially it operated as a
subsidiary of Reserve Bank of India RBI
transferred it to GOI . Many institutes of
national importance finds their roots in
IDBI like SIDBI, Exim bank, NSE and NSDL.
The war cry for reforms in financial space
saw GOI reducing its stake in the bank in
the year 2019. At present, Life Insurance
Corporation of India holds 51% stake in
IDBI Bank. Following Life Insurance
Corporation of India (LIC) acquiring 51 per
cent of the total paid-up equity share
capital of the bank, IDBI Bank has been
categorised as a private sector bank for
regulatory purposes with effect from
January 21, 2019.
 IDBI Bank Limited

Bank Aisa Dost Jaisa

Type Private Sector
Bank(Regulatory
purpose only)
Traded as BSE: 500116
NSE: IDBI
Industry Banking

Founded 1 July 1964[1]

Founder GOI by Act of

Parliament
Headquarters IDBI Tower, WTC
Complex, Cuffe
Parade, Colaba,
Mumbai,
 Maharashtra, India[2]
Key people Hemant Bhargava
(Non-Exe Chairman)[3]
Rakesh Sharma
(MD & CEO)[4]
Suresh Kishinchand
Khatanhar
(Deputy MD)[5]

Products Investment Banking

Consumer Banking
Commercial Banking
Retail Banking
Banking
Asset Management
Pensions
Mortgages
Credit Cards
Owner LIC of India
Number of 18000 (Mar 2019)
employees
Parent LIC

Subsidiaries IDBI Capital Markets

& Securities
IDBI Intech
IDBI Asset
Management
IDBI MF Trustee
Company
IDBI Trusteeship
Services
IDBI Federal Life
Insurance Company[6]
Website www.idbibank.in
For the first quarter of the current financial
year 2017-18, the bank reported a net loss
of Rs.853 crore compared to a profit of
Rs.241 crore during the corresponding
period last financial year. In the fourth
quarter of financial year 2016-17, the bank
had reported a loss of Rs.3,200 crore.

While the reported loss was lower than the

preceding quarter, bad loans continued to
surge. In the quarter ending September
2017 the bank bounced back with a loss of
Rs.198 crore compared to a loss of over
Rs.2,000 crore in the previous quarter. The
bank is expected to return to profit in the
upcoming financial year.

It currently has 3,702 ATMs, 1892

branches, including one overseas branch in
Dubai, 58 e-lounges and 1407 centers.

The bank has an aggregate balance sheet

size of INR 3.74 trillion as on 31 March
2016"About us" . IDBI Bank. Retrieved
22 February 2014. On June 29, 2018 Life
Insurance Corporation of India (LIC) has
got a technical go-ahead from Insurance
Regulatory and Development Authority of
India (IRDAI) to increase stake in IDBI Bank
up to 51%. [7] LIC of India completed
acquisition of 51% controlling stake in IDBI
Bank on January 21, 2019 making it the
majority shareholder of the bank.
Subsequent to enhancement of equity
stake by LIC of India on January 21, 2019,
Reserve Bank Of India has clarified vide a
Press Release dated March 14, 2019, that
IDBI Bank stands re-categorized as a
Private Sector Bank, with retrospective
effect from January 21, 2019.

History
Overview of development banking in
India

Development Banking emerged after the

Second World War and the Great
Depression in the 1930s. The demand for
reconstruction funds for the affected
nations compelled in setting up of national
institutions for reconstruction. At the time
of Independence in 1947, India had a fairly
developed banking system. The adoption
of bank dominated financial development
strategy was aimed at meeting the
sectoral credit needs, particularly of
agriculture and industry. Towards this end,
the Reserve Bank concentrated on
regulating and developing mechanisms for
institution building. The commercial
banking network was expanded to cater to
the requirements of general banking and
for meeting the short-term working capital
requirements of industry and agriculture.
Specialised development financial
institutions (DFIs) such as the IDBI,
NABARD, NHB and SIDBI were set up to
meet the long-term financing requirements
of industry and agriculture.

Formation of Industrial Development

Bank of India (IDBI)

The Industrial Development Bank of India

(IDBI) was established in 1964 under an
Act of Parliament as a wholly owned
subsidiary of the Reserve Bank of India. In
1976, the ownership of IDBI was
transferred to the Government of India and
it was made the principal financial
institution for coordinating the activities of
institutions engaged in financing,
promoting and developing industry in India.
IDBI provided financial assistance, both in
rupee and foreign currencies, for green-
field projects and also for expansion,
modernisation and diversification
purposes. In the wake of financial sector
reforms unveiled by the government since
1992, IDBI also provided indirect financial
assistance by way of refinancing of loans
extended by State-level financial
institutions and banks and by way of
rediscounting of bills of exchange arising
out of sale of indigenous machinery on
deferred payment terms.

After the public issue of IDBI in July 1995,

the government shareholding in the bank
came down from 100% to 75%.

IDBI played a pioneering role, particularly in

the pre-reform era (1964–91), in catalyzing
broad based industrial development in
India in keeping with its Government-
ordained ‘development banking’ charter.
Some of the institutions built with the
support of IDBI are the Securities and
Exchange Board of India (SEBI), National
Stock Exchange of India (NSE), the
National Securities Depository Limited
(NSDL), the Stock Holding Corporation of
India Limited (SHCIL), the Credit Analysis &
Research Ltd, the Exim Bank (India), the
Small Industries Development Bank of
India (SIDBI) and the Entrepreneurship
Development Institute of India.

Conversion of IDBI into a commercial

bank

A committee formed by RBI recommended

the development financial institution (IDBI)
to diversify its activity and harmonise the
role of development financing and banking
activities by getting away from the
conventional distinction between
commercial banking and developmental
banking. Alexander Hamilton the right-
hand man was against this but stayed
dead silent. To keep up with reforms in
financial sector, IDBI reshaped its role from
a development finance institution to a
commercial institution. With the Industrial
Development Bank (Transfer of Undertaking
and Repeal) Act, 2003, IDBI attained the
status of a limited company viz., IDBI Ltd.

Subsequently, in September 2004, the

Reserve Bank of India incorporated IDBI as
a 'scheduled bank' under the RBI Act, 1934.
Consequently, IDBI, formally entered the
portals of banking business as IDBI Ltd.
from 1 October 2004. The commercial
banking arm, IDBI BANK, was merged into
IDBI in 2005.

Acquisition of United Western Bank

In 2006, IDBI Bank acquired United Western

Bank (headquartered at Satara) in a
rescue. By acquiring UWB, IDBI Bank more
than doubled the number of its branches
from 195 to 425.[8][9]
Acquisition of IDBI Bank by LIC

LIC of India completed acquisition of 51%

controlling stake in IDBI Bank on January
21, 2019 making it the majority
shareholder of the bank. Subsequent to
enhancement of equity stake by LIC of
India on January 21, 2019, Reserve Bank
Of India has clarified vide a Press Release
dated March 14, 2019, that IDBI Bank
stands re-categorized as a Private Sector
Bank, with retrospective effect from
January 21, 2019.
Listings and shareholding
IDBI Bank's equity shares are listed on
Bombay Stock Exchange and the National
Stock Exchange of India.[10][11]

As of 22 January 2019, Government of

India held 46.46% shares in IDBI Bank and
Life Insurance Corporation of India held
approximately 51% of the shares. But now
LIC owns the bank with capped voting
right.

Employees
As of 31 March 2015, the bank had 16,555
employees, out of which 197 were
employees with disabilities.[12] The
average age of bank employees on the
same date was 34 years.[12] The bank
reported business of INR 25.64 crores per
employee and net profit of INR 12.17 lakhs
per employee during the FY 2012-13.[12]
The company incurred INR 1,538 crores
towards employee benefit expenses during
the same financial year. As promised by
banks MD and CEO the employees will
keep getting the same benefits and enjoy
same job security even after LIC getting
the promotor status.

Collaboration With KfW

Germany
IDBI Bank Ltd, through its DIFC Branch in
Dubai, has signed a loan agreement for
US$340 million with KfW, Germany. The
loan has a maturity of 10 years and carries
a competitive rate of interest. Shri Melwyn
Rego, deputy managing director of IDBI
Bank Ltd. represented IDBI Bank Ltd., and
Dr. Norbert Kloppenburg, member of the