Insurance Regulatory and Development Authority of India (IRDAI) will place a timeline for LIC to convey downward its stake in IDBI Bank to below 15 percent, its chairman Subhash Khuntia said.
He clarifies that the indemnity massive has been given the endorsement to acquire 51 percent stake on the state of bringing it down to below 15 percent over a phase of time but the timeline would depend on the business plan of LIC for the concerned lender.
"We will have to inquire them to transport down the stake. That is the state under which they have been given permission. They have to bring down the stake to 15 percent ultimately."
At present, the allowable limit for an insurer to hold wager in any listed being is 15 percent. But LIC with special indulgence from IRDAI holds more than the limit in some state-run banks.
IRDAI in June last year allowable LIC to choose up to 51 percent stake in the overdrawn IDBI Bank. On January 21, IDBI Bank had received Rs 5,030 crore from LIC and on December 28, 2018, LIC had pumped in Rs 14,500 crore capitals into the bank as part of its conquest.
"That (timeline) we will have to fix. That is yet to be fixed. The condition that has been put is ultimately they will have to bring down (below 15 percent). How much time that will be, looking at their business plan and… We will decide," Khuntia said.
Replying to a question, the IRDAI chief said in outstanding cases, the controller may allow other insurance companies to augment their stakes beyond 15 percent.
"That will be (based) on the merit of the case. No bar means it is on exceptions. It is only on outstanding circumstances, if they can justify, they can be allowable," he said when asked if there is any bar on other companies to follow the Bank model.
On insurance reporting, as part of cybersecurity, he said some of the insurers are formulate their own products for cybersecurity cover and the regulator will enable them by conduct workshops and other consciousness programs to develop skills in the subject.