The questions came up during one-on-one meetings with government officials and transaction advisors to understand the transaction before it was formally launched. People had earlier said that the roadshow was followed by meetings with a wider group of potential bidders.
The bidders have expressed concern about possible investment in the bank which is subject to the scrutiny of the CAG in future.
The CVC also follows the guidelines for investigation of internal complaints of suspected irregularities, which have been raised as a concern by the bidders.
However, a government official on condition of anonymity termed it a “non-issue” and denied that any such concerns were cited by potential bidders. The official claimed that the CAG does not audit the bank. However, the official said that the inspection was done by the CVC, which will go on once the privatization is done.
IDBI Bank has a market value of over $4.7 billion and big investments are at stake if it is privatized.
Emailed queries to the Department of Investment and Public Asset Management did not elicit any response till press time on Monday.
Although IDBI Bank was reclassified as a private sector bank by the Reserve Bank of India on January 21, 2019, it is still open to scrutiny by the CAG and CVC due to its government ownership. happened after reclassification
Took 51% stake in the lender. Presently the lender holds 49.24% stake and the Government of India holds 45.48%.
The CAG conducted a performance review audit of government funds spent on recapitalization of public sector banks till the financial year 2016-17. This also includes the amount spent on recapitalization of IDBI Bank. According to a report by the Press Trust of India on January 3, 2021, the CAG has again written to the finance ministry to conduct a performance audit of public sector banks that have received government funding after 2017. In its final report, it had pointed out. Discrepancies in the distribution of capital to different banks.
IDBI Bank received ₹9,300 crore capital from the Government of India and LIC in the financial year 2019-20. Out of this, the government’s contribution was ₹4,557 crore.