Indian Government Clarifies Legal Stakes in IDBI Bank Disinvestment

In the past, the government has reported selling its stake in IDBI Bank, after which discussions about its legal stakes have also intensified. Now the Ministry of Finance has clarified that there is no legal impediment in reducing the government's stake in IDBI Bank or its strategic disinvestment. The Ministry responded to media reports and comments that questioned the divestment on the basis of legislative developments of 2003. Some sections opposing the divestment were trying to portray the government's decision as illegal based on a 2018 order of the Delhi High Court, which the Ministry rejected with facts. The Ministry of Finance says that an amendment banning the government's stake reduction was proposed in 2003 during the discussion of the Union Budget and the parliamentary debate on the IDBI Act, 2003. However, the amendment did not pass and did not form part of the final legislation passed. Later, the Delhi High Court in the case of All India Office of IDBI Bank v. Union of India Association in the case of 17th December 2018 said that the central government's statement in paragraph 42 before the judgment was rejected by the court.