What is the exact current status of IDBI & IDBI Ltd?
- Industrial Development Bank of India (IDBI) was set in July 1964 (under Industrial Development bank of India act 1964) as wholly owned subsidiary of Reserve Bank of India and to function as apex institution in the field of industrial development banking.
- The basic functions of IDBI were to provide financial assistance to industrial enterprises and promote institutions engaged in industrial development.
- IDBI remained as a subsidiary bank of RBI till in 1976. In 1976 (February 16, 1976) , it was separated from Reserve bank of India and the 100% ownership was transferred to Government of India.
- After this arrangement IDBI became India’s principal financial institution for coordinating the activities of institutions engaged in financing, promoting and developing industry in the country.
- In 1995 IDBI’s domestic IPO came which reduced the Govt. of India’s stake to 72%. The post-capital restructuring lead to 58.1 % share of Government of India.
- The current stake of Government of India in the bank is around 53%.
- The Industrial Development Bank (Transfer of undertaking and repeal) Act 2003 was passed by the Parliament of India to form it a company under the companies act 1956 and repeal the IDBI act 1964.
- Subsequently IBDI got the certificate of commencement of business on 2 September 2004.
- This transformed IDBI to IBDI Ltd. on October 1, 2004. Subsequently IDBI became a company under the companies’ act 1956.
- IDBI Bank Ltd was hitherto subsidiary of IDBI Ltd which got the status of a scheduled bank under the RBI act 1934 on October 11, 2004. It got merged with its parent company IDBI Ltd on April 2, 2005 (however ‘appointed date of merger was fixed October 1, 2004)
- On 3 October 2006, United Western Bank Ltd (UWB), a private sector bank merged with IDBI. In 2006 IDBI forayed into Life Insurance Business jointly with Federal Bank and Fortis Insurance International N.V. Fortis.
- IDBI Gilts Ltd was incorporated as a wholly subsidiary of IDBI Bank in 2006.
Thus we can understand that after October 2004 merger of the erstwhile IDBI Bank with its parent company IDBI Ltd, has now become a universal Bank. Today IDBI Ltd is one of the India’s largest Banks. RBI categorized IDBI as an “other public sector bank”. Currently IDBI is fourth Largest Bank in India.