Government not keen to provide any additional capital to IDBI bank

NEW DELHI: The government is not keen to provide any additional capital to IDBI Bank, which requires around Rs 7,000 crore to meet regulatory requirements and enhance its lending book.The bank has indicated that it will need this money in the current fiscal itself, according to two officials aware of the development. It had reported a loss of Rs 4,918 crore in the last quarter of FY19 and Rs 15,116 crore for the full year.“The bank is already monetising its non-core assets to raise capital. Any public offer will depend on how much active participation is there from the promoter and the second largest shareholder,” said one of the officials. Since the government is not keen to participate in a rights issue, that may not be a feasible option, he said.IDBI and LIC didn’t respond to queries.LIC and IDBI are discussing capital-raising plans with the government, the second official said.“There can be a qualified institutional placement (QIP) offering or the bank can raise money through a follow-on offer,” he said.There may be little interest from investors given current market conditions, a senior bank executive said.

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