Page 7 - Banking Finance July 2021

BANK UPDATE

Tier-II capital of a bank includes to assist in strategic sale of its equity, have to submit their bids by July 13.
undisclosed reserves, revaluation along with transfer of management With the Cabinet clearance in place
reserves, and subordinate debt. control, in IDBI Bank to private and legislative provisions in line, IDBI

A call option bond provides the issuer players. Bank transaction is expected to be
faster than the process of privatising
of the bond to repay the debt before Transaction advisor - which could be
two other banks, announced in the
the maturity, especially when the consulting firms, investment or
Budget.
interest rates are falling as servicing a merchant bankers, and financial
debt at a higher rate is not prudent. institutions/banks - will undertake tasks
related to all aspects of proposed ICICI Bank Launches New
To comply with Basel-III capital
regulations, banks globally need to strategic disinvestment. It will include Corporate Banking
improve and strengthen their capital assisting the government on modalities Products
planning processes in the aftermath of of disinvestment and the timing,
structuring the transaction, organizing ICICI Bank announced what it is calling
the Lehman Brothers failure.
roadshows for potential investors, and "ICICI STACK for Corporates" - a set of
These norms are being implemented suggesting measures to fetch optimum packaged banking services tailored for
to mitigate concerns on potential
value. more than 15 distinct industries.
stresses on asset quality and
consequential impact on performance The advisor will help in negotiations ICICI is among India's leading private
and profitability of banks. with shortlisted bidders, fixing the sector banks with strong presences in
range of fair reserve price, and support insurance, asset management,
The Indian banking system has been IDBI Bank in setting up of the e-data securities brokerage services and
implementing Basel-III standards in room that would help investors in private equity. ICICI Bank states in
phases since April 1, 2013.
conducting due diligence, according to marketing materials that it operates in
the draft request for proposal 15 countries.
AIBOA appeals to document released by the Department ICICI STACK for Corporates is "a

President of India against of Investment and Public Asset comprehensive set of digital banking
Management (DIPAM). solutions for corporates and their
privatisation of two PSBs
"The advisor will assist government in entire ecosystem including promoters,
The All India Bank Officers' Association fixing the range of the fair reserve group companies, employees, dealers,
(AIBOA) has appealed to the President vendors and all other stakeholders,"
of India to advise the Council of price considering the valuation of IDBI
Bank Limited, based on the methods the news release from the bank
Ministers to rescind the proposed
employed in the financial services announcing the new offerings states.
moves to privatise two public sector "The wide range of 360-degree
banks (PSBs) and undertake strategic sector and highlighting the pros and solutions enables corporates to
disinvestment in IDBI Bank. cons of various methods and also
highlighting the fact that many seamlessly meet all banking
S Nagarajan, General Secretary, variations of these valuations exist. The requirements of their ecosystem in an
AIBOA, in a letter to President Ram GoI will have the option of valuation expeditious and frictionless manner."
Nath Kovind, emphasised that during done from any other agency," said the Simultaneously, ICICI announced it will
the past 51 years, the nationalised RFP document. operate branches dedicated to
banks continuously contributed to the corporate services. Five new branches
growth of the economy and were The government currently owns 45.48 are in Mumbai and three in other
instrumental in all developmental per cent equity in IDBI Bank, while Life areas. Four more are coming in the
activities without exception. Insurance Corporation has 49.24 per
cent stake and remaining 5.29 equity short-term, according to bank.
IDBI Bank privatisation is held by public shareholders. Public The company stated in the
Sector Banks cannot participate as announcement that the "four main
process starts bidders for acquisition of IDBI Bank in pillars" of the new offerings are: digital
The government has invited bids to the transaction process, DIPAM has banking products for businesses; digital
appoint transactions and legal advisors stated. Transactions and legal advisors banking products for channel partners

BANKING FINANCE | JULY | 2021 | 7