The IDBI Bank Limited (IDBI Bank or IDBI) is a
development finance institution
A development financial institution (DFI), also known as a development bank or development finance company (DFC), is a financial institution that provides risk capital for economic development projects on a non-commercial basis.
, total commitme ...
under the ownership of
Life Insurance Corporation of India
Life Insurance Corporation of India (LIC) is an Indian Public Sector Undertakings in India, central public sector undertaking headquartered in Mumbai, Maharashtra, India. It is under the ownership of Ministry of Finance (India), Ministry of Fi ...
and
Government of India
The Government of India (ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the national government of the Republic of India, a federal democracy located in South Asia, c ...
. It was established in 1964 as Industrial Development Bank of India, a
development finance institution
A development financial institution (DFI), also known as a development bank or development finance company (DFC), is a financial institution that provides risk capital for economic development projects on a non-commercial basis.
, total commitme ...
, which provided financial services to industrial sector. In 2005, the institution was merged with its commercial division, IDBI Bank, forming the present-day banking entity and was categorised as "other development finance institution" category. Later in March 2019,
Government of India
The Government of India (ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the national government of the Republic of India, a federal democracy located in South Asia, c ...
asked
Life Insurance Corporation
Life Insurance Corporation of India (LIC) is an Indian central public sector undertaking headquartered in Mumbai, Maharashtra, India. It is under the ownership of Ministry of Finance, Government of India.
The Life Insurance Corporation of In ...
to infuse capital in the bank due to high
NPA and capital adequacy issues and also asked LIC to manage the bank to meet the regulatory norms. IDBI was put under Prompt corrective action of the RBI and on 10th March 2021 IDBI came out of the PCA. At present direct and indirect shareholding of
Government of India
The Government of India (ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the national government of the Republic of India, a federal democracy located in South Asia, c ...
in IDBI Bank is approximately 95%, which Government of India (GoI) vide its communication F.No. 8/2/2019-BO-II dated December 17, 2019, has clarified and directed all Central/State Government departments to consider IDBI Bank for allocation of Government Business.
Many national institutes find their roots in IDBI like
SIDBI
Small Industries Development Bank of India (SIDBI) is the apex regulatory body for overall licensing and regulation of micro, small and medium enterprise finance companies in India. It is under the jurisdiction of Ministry of Finance , Governm ...
,
EXIM
Exim is a mail transfer agent (MTA) used on Unix-like operating systems. Exim is free software distributed under the terms of the GNU General Public License, and it aims to be a general and flexible mailer with extensive facilities for checking ...
,
National Stock Exchange of India
National Stock Exchange of India Limited (NSE) is the leading stock exchange under the ownership of various group of domestic and global financial institutions, public and privately owned entities and individuals. It is located in Mumbai, Mah ...
,
SEBI
The Securities and Exchange Board of India (SEBI) is the regulatory body for securities and commodity market in India under the ownership of Ministry of Finance within the Government of India. It was established on 12 April 1988 as an executive ...
,
National Securities Depository Limited
National Securities Depository Limited (NSDL) is an Indian central securities depository, based in Mumbai. It was established in August 1996 as the first electronic securities depository in India with national coverage. It was established base ...
.
The bank has an aggregate balance sheet size of . It has 3,683 ATMs, 1,892 branches, including one overseas branch in
Dubai
Dubai (, ; ar, دبي, translit=Dubayy, , ) is the most populous city in the United Arab Emirates (UAE) and the capital of the Emirate of Dubai, the most populated of the 7 emirates of the United Arab Emirates.The Government and Politics of ...
, 58 e-lounges and 1,407 centres . ,
Life Insurance Corporation
Life Insurance Corporation of India (LIC) is an Indian central public sector undertaking headquartered in Mumbai, Maharashtra, India. It is under the ownership of Ministry of Finance, Government of India.
The Life Insurance Corporation of In ...
holds the 49.24% shareholding and the
Central government
A central government is the government that is a controlling power over a unitary state. Another distinct but sovereign political entity is a federal government, which may have distinct powers at various levels of government, authorized or dele ...
holds 45.48%, with LIC being in control of the management of the bank.
History
Overview of development banking in India
Development Banking emerged after the
Second World War
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
and the
Great Depression
The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
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
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union,
and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...
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. Specialized Development Financial Institutions (DFIs) such as the IDBI,
NABARD
National Bank for Agriculture and Rural Development (NABARD) is an apex regulatory body for overall regulation of regional rural banks and apex cooperative banks in India. It is under the jurisdiction of Ministry of Finance, Government of India ...
,
NHB and
SIDBI
Small Industries Development Bank of India (SIDBI) is the apex regulatory body for overall licensing and regulation of micro, small and medium enterprise finance companies in India. It is under the jurisdiction of Ministry of Finance , Governm ...
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
Acts of Parliament, sometimes referred to as primary legislation, are texts of law passed by the Legislature, legislative body of a jurisdiction (often a parliament or council). In most countries with a parliamentary system of government, acts of ...
as a wholly-owned subsidiary of the
Reserve Bank of India
The Reserve Bank of India, chiefly known as RBI, is India's central bank and regulatory body responsible for regulation of the Indian banking system. It is under the ownership of Ministry of Finance, Government of India. It is responsible for ...
. In 1976, the ownership of IDBI was transferred to the Union government 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, modernization, 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 the 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
The Securities and Exchange Board of India (SEBI) is the regulatory body for securities and commodity market in India under the ownership of Ministry of Finance within the Government of India. It was established on 12 April 1988 as an executive ...
(SEBI),
National Stock Exchange of India
National Stock Exchange of India Limited (NSE) is the leading stock exchange under the ownership of various group of domestic and global financial institutions, public and privately owned entities and individuals. It is located in Mumbai, Mah ...
(NSE), the
National Securities Depository Limited
National Securities Depository Limited (NSDL) is an Indian central securities depository, based in Mumbai. It was established in August 1996 as the first electronic securities depository in India with national coverage. It was established base ...
(NSDL), the
Stock Holding Corporation of India Limited
Stock Holding Corporation of India Limited (SHCIL) is an Indian custodian and depository participant, based in Navi Mumbai, Maharashtra. SHCIL was established in 1986 as a public limited company and is a subsidiary of IFCI. It is also responsi ...
(SHCIL), the Credit Analysis & Research Ltd, the
Exim Bank (India) Exim Bank or Export-Import Bank may refer to:
* Exim Bank (Bangladesh), one of the leading private commercial banks in Bangladesh
*Exim Bank (Comoros), a commercial bank in the Comoros
*Exim Bank (Djibouti), a commercial bank in Djibouti
* Exim Bank ...
, the
Small Industries Development Bank of India
Small Industries Development Bank of India (SIDBI) is the apex regulatory body for overall licensing and regulation of micro, small and medium enterprise finance companies in India. It is under the jurisdiction of Ministry of Finance , Governm ...
(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 harmonize the role of development financing and banking activities by getting away from the conventional distinction between commercial banking and developmental banking. 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
The Reserve Bank of India, chiefly known as RBI, is India's central bank and regulatory body responsible for regulation of the Indian banking system. It is under the ownership of Ministry of Finance, Government of India. It is responsible for ...
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.
Direct government intervention
The merger was expected to streamline operations of the bank. However, IDBI continued to base its policy towards industrial sector like the erstwhile IDBI entity did. This resulted in the retail business of the bank to be limited to 13 percent of its total business. , the total
Non Performing Assets (NPA) A non-performing loan (NPL) is a bank loan that is subject to late repayment or is unlikely to be repaid by the borrower in full. Non-performing loans represent a major challenge for the banking sector, as it reduces the profitability of banks, and ...
rose to and were about 28 percent of its total loans. This was the highest among Indian banks. The Union government intervened, with
Life Insurance Corporation
Life Insurance Corporation of India (LIC) is an Indian central public sector undertaking headquartered in Mumbai, Maharashtra, India. It is under the ownership of Ministry of Finance, Government of India.
The Life Insurance Corporation of In ...
bailing out the bank with an infusion of crores.
On 29 June 2018, LIC got a technical go-ahead from the Insurance Regulatory and Development Authority of India (IRDAI) to increase stake in IDBI Bank up to 51%. LIC completed the acquisition of 51% controlling stake on 21 January 2019, with a total investment of crores.
Operations
Acquisition of United Western Bank
In 2006, IDBI Bank acquired
United Western Bank
United Western Bank (UWB) was an Indian bank founded in 1936 that IDBI Bank acquired in 2006 in a rescue. The Reserve Bank of India placed UWB under a moratorium to protect the interest of public and depositors as growing losses eroded its capita ...
(headquartered at
Satara) in a rescue. By acquiring UWB, IDBI Bank doubled the number of its branches from 195 to 425.
Strategic disinvestment to LIC
LIC of India completed the acquisition of 51% controlling stake in the bank in January 2019, making it the majority shareholder. Subsequent to the enhancement of equity stake by LIC of India, Reserve Bank of India has clarified via press release on 14 March 2019, that IDBI Bank stands re-categorised as a private sector bank, with retrospective effect from 21 January 2019. LIC took over the management control of the bank while the Union government, categorised as a promoter.
Listings and shareholding
IDBI Bank's equity shares are listed on
Bombay Stock Exchange
BSE Limited, also known as the Bombay Stock Exchange (BSE), is an Indian stock exchange. It is located on Dalal Street in Mumbai. Established in 1875 by cotton merchant Premchand Roychand, a Jain businessman, it is the oldest stock exchange in ...
and the
National Stock Exchange of India
National Stock Exchange of India Limited (NSE) is the leading stock exchange under the ownership of various group of domestic and global financial institutions, public and privately owned entities and individuals. It is located in Mumbai, Mah ...
. , the Union government held 45.48% shares in IDBI Bank, while LIC held 49.24% and the remaining is held by non-promoters.
Employees
As of 31 March 2015, the bank had 16,555 employees, out of which 197 were employees with
disabilities
Disability is the experience of any condition that makes it more difficult for a person to do certain activities or have equitable access within a given society. Disabilities may be cognitive, developmental, intellectual, mental, physical, se ...
.
The average age of bank employees on the same date was 34 years.
[ The bank reported a business of ₹25.64 crores per employee and a net profit of ₹12.17 lakhs per employee during the FY 2012–13.][ The company incurred a loss of ₹1,538 crores towards ]employee benefit
Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any othe ...
expenses during the same financial year. As promised by the bank's MD and CEO the employees will keep getting the same benefits and enjoy the same job security even after LIC getting the promoter status.
IDBI Intech
IDBI Intech Ltd. (IIL) is a wholly owned subsidiary of IDBI Bank, established in 2000.
It provides IT related services in the areas of Consultancy
A consultant (from la, consultare "to deliberate") is a professional (also known as ''expert'', ''specialist'', see variations of meaning below) who provides advice and other purposeful activities in an area of specialization.
Consulting servic ...
, System Integration, System implementation & support, Applications & Server hosting and other IT related managed services and specialized training.
IDBI Intech has been accredited with ISO 9001:2000 certification for IT-related services including Data Centre Management and Call Centre, and also Certified IT Security Auditing Organisation with the Indian Computer Emergency Response Team
The Indian Computer Emergency Response Team (CERT-IN or ICERT) is an office within the Ministry of Electronics and Information Technology of the Government of India. It is the nodal agency to deal with cyber security threats like hacking and phis ...
(CERT-In).
Awards and recognitions
* IDBI Bank ranked #1197 in the Forbes Global 2000
The ''Forbes'' Global 2000 is an annual ranking of the top 2000 public companies in the world, published by ''Forbes'' magazine. "The Global 2000" annual ranking is assembled by ''Forbes'' using a weighted assessment of four metrics: sales, profi ...
in May 2013.
* It received the 'Overall Best Bank' and 'Best Public Sector Bank' awards in the Dun & Bradstreet Banking Awards, 2011.
* In 2011, it received Banking Technology awards for best use of Business Intelligence and the best Risk Management from Indian Banks Association.
See also
* Banking in India
Modern banking in India originated in the mid of 18th century. Among the first banks were the Bank of Hindustan, which was established in 1770 and liquidated in 1829–32; and the General Bank of India, established in 1786 but failed in 1791. ...
* Indian Financial System Code
The Indian Financial System Code (IFS Code or IFSC) is an alphanumeric code that facilitates electronic funds transfer in India. A code uniquely identifies each bank branch participating in the three main Payment and settlement systems in India: th ...
* List of largest banks
The following are lists of the largest banks in the world, as measured by total assets.
By total assets
The list is based on the April 2022 S&P Global Market Intelligence report of the 100 largest banks in the world. The ranking was based upon a ...
* List of companies of India
India is a country in South Asia. It is the seventh-largest country by area, the second-most populous country (with over 1.2 billion people), and the most populous democracy in the world.
In 2019, the Indian economy was the world's fifth ...
* Make in India
Make in India is an initiative by the Government of India to create and encourage companies to develop, manufacture and assemble products made in India and incentivize dedicated investments into manufacturing. The policy approach was to creat ...
* IDBI Federal Life Insurance
Ageas Federal Life Insurance Co Ltd. (Formerly known as IDBI Federal Life Insurance) is a joint-venture of Federal Bank, which is a private sector banks in India and Ageas.
Ageas Federal distributes its products through a multi-channel network ...
References
External links
*
{{DEFAULTSORT:Idbi Bank
Banks established in 1964
Banks based in Mumbai
Indian companies established in 1964
Private sector banks in India
Life Insurance Corporation
1964 establishments in Maharashtra
Companies listed on the National Stock Exchange of India
Companies listed on the Bombay Stock Exchange