Rakesh Sharma to head IDBI Bank for six months

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The government on Friday appointed senior banker Rakesh Sharma as managing director (MD) and chief executive officer (CEO) of IDBI Bank.

Sharma was appointed for six months or until further orders and will have the task of ensuring a smooth transfer of majority ownership from the government to Life Insurance Corporation of India (LIC).

This comes after the tenure of B Sriram who was appointed as the chief executive of IDBI Bank for three months ended in September 2018.

“It is expected that Life Insurance Corporation (LIC) will continue with Sharma given his professional track record. Also, if they decide to go for a fresh selection, Sharma will have a strong chance,” said another official aware of the developments.

Earlier this week, IDBI Bank board approved the proposal for issuance of preferential shares in favour of LIC to increase the share of insurer in the bank up to 51%.

In a regulatory filing, IDBI Bank said, “The board of directors of directors of the target company (IDBI Bank) in their meeting held on October 4, 2018 have authorised the preferential allotment representing up to 51% of the fully diluted voting share capital (preferential issue) in favour of the acquirer (LIC) along with the acquisition control.”

LIC then came out with an open offer for acquiring 26% of equity in IDBI Bank Rs 61.73 per share, a total payout of over Rs 12,602 crore.

The bank’s board also approved increasing authorised capital of the bank from Rs 8,000 crore to Rs 15,000 crore.

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