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Rakesh Sharma to head IDBI Bank for six months

Earlier this week, IDBI Bank board approved the proposal for issuance of preferential shares in favour of LIC to increase the share of insurer in the bank up to 51%.

, ET Bureau|
Updated: Oct 08, 2018, 09.51 AM IST
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Govt appoints Rakesh Sharma as IDBI chief for six months
Govt appoints Rakesh Sharma as IDBI chief for six months
NEW DELHI: The government has appointed Rakesh Sharma as managing director and CEO of IDBI Bank for a period of six months. Sharma till July 2018 was the chief executive of Canara Bank.

“The appointment committee of the cabinet (ACC) has approved the proposal to appoint Rakesh Sharma for a period of six months…” the government’s statement noted.

This comes after the tenure of B Sriram who was appointed as the chief executive of IDBI for three months ended in September 2018.

“Sharma has the experience of heading a large PSB,” said a government official said adding that he came through a rigorous process through which private sector candidates were appointed heads of state run banks.

In mid-August 2015, the government had roped in private sector professionals to run two of its largest banks -- Bank of Baroda and Canara Bank.

Prior to that Rakesh Sharma was heading Lakshmi Vilas Bank.

“It is expected that Life Insurance Corporation (LIC) will continue with Sharma given his professional track record. Also, if they decide to go for a fresh selection, Sharma will have a strong chance,” said another official aware of the developments.

Earlier this week, IDBI Bank board approved the proposal for issuance of preferential shares in favour of LIC to increase the share of insurer in the bank up to 51%.

In a regulatory filing, IDBI Bank said, “The board of directors of the target company (IDBI Bank) in their meeting held on October 4, 2018 have authorised the preferential allotment representing up to 51% of the fully diluted voting share capital (preferential issue) in favour of the acquirer (LIC) along with the acquisition control.”

LIC then came out with an open offer for acquiring 26% of equity in IDBI Bank Rs 61.73 per share, a total payout of over Rs 12,602 crore.

The bank’s board also approved increasing authorised capital of the bank from Rs 8,000 crore to Rs 15,000 crore.

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