IDBI Bank

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IDBI Bank Limited
Type
IndustryFinancial services
Founded1 July 1964; 56 years ago (1964-07-01)[1]
FounderGovernment of India by an Act of Parliament
HeadquartersIDBI Tower, WTC Complex, Cuffe Parade, ,
India[2]
Key people
Products
RevenueDecrease 24,504 crore (US$3.4 billion) (2021)
Increase 2,484 crore (US$350 million) (2021)
Increase 1,514 crore (US$210 million) (2021)
Total assetsDecrease 300,713 crore (US$42 billion) (2021)
Total equityDecrease 24,455 crore (US$3.4 billion) (2020)
Owner
Number of employees
18,000 (March 2019)
Subsidiaries
  • IDBI Capital Markets & Securities
  • IDBI Intech
  • IDBI Asset Management
  • IDBI MF Trustee Company
  • IDBI Trusteeship Services
  • IDBI Federal Life Insurance Company[3]
Capital ratio13.31%
Websitewww.idbibank.in

Industrial Development Bank of India (IDBI Bank Limited or IDBI Bank or IDBI) was established in 1964 by an act to provide credit and other financial facilities for the development of the fledgling Indian industry. It is a development finance institution and a subsidiary of Life Insurance Corporation. Many national institutes find their roots in IDBI like SIDBI, India Exim Bank,[4] National Stock Exchange of India and National Securities Depository Limited.

Initially, it operated as a subsidiary of the Reserve Bank of India and later RBI transferred it to the Government of India. On 29 June 2018, Life Insurance Corporation of India (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%.[5] LIC completed the acquisition of 51% controlling stake on 21 January 2019 making it the majority shareholder of the IDBI Bank. Reserve Bank of India clarified, via a press release dated 14 March 2019, that IDBI Bank stands re-categorized as a Private Sector Bank for regulatory purposes with effect from 21 January 2019.

The bank has an aggregate balance sheet size of ₹3.74 trillion as on 31 March 2016.[6] It has 3,683 ATMs, 1,892 branches, including one overseas branch in Dubai, 58 e-lounges and 1,407 centers as of 1 February 2020.[7]

History[edit]

Overview of development banking in India[edit]

Development Banking emerged after the Second World War and the Great Depression 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 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, NHB and SIDBI were set up to meet the long-term financing requirements of industry and agriculture.

Formation of Industrial Development Bank of India (IDBI)[edit]

The Industrial Development Bank of India (IDBI) was established in 1964 under an Act of Parliament as a wholly-owned subsidiary of the Reserve Bank of India. In 1976, the ownership of IDBI was transferred to the Government of India 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.[citation needed]

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.[citation needed]
Some of the institutions built with the support of IDBI are the Securities and Exchange Board of India (SEBI), National Stock Exchange of India (NSE), the National Securities Depository Limited (NSDL), the Stock Holding Corporation of India Limited (SHCIL), the Credit Analysis & Research Ltd, the Exim Bank (India), the Small Industries Development Bank of India (SIDBI) and the Entrepreneurship Development Institute of India.

Conversion of IDBI into a commercial bank[edit]

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 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.

Acquisition of United Western Bank[edit]

In 2006, IDBI Bank acquired United Western Bank (headquartered at Satara) in a rescue. By acquiring UWB, IDBI Bank doubled the number of its branches from 195 to 425.[8][9]

Privatisation: Sale to LIC[edit]

LIC of India completed the acquisition of 51% controlling stake in IDBI Bank on 21 January 2019 making it the majority shareholder of the bank. Subsequent to the enhancement of equity stake by LIC of India on 21 January 2019, Reserve Bank of India has clarified vide a Press Release dated 14 March 2019, that IDBI Bank stands re-categorized as a Private Sector Bank, with retrospective effect from 21 January 2019.

Listings and shareholding[edit]

IDBI Bank's equity shares are listed on Bombay Stock Exchange and the National Stock Exchange of India.[10][11]

As of 22 January 2019, Government of India held 46.46% shares in IDBI Bank.

Employees[edit]

As of 31 March 2015, the bank had 16,555 employees, out of which 197 were employees with disabilities.[12] The average age of bank employees on the same date was 34 years.[12] 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.[12] The company incurred a loss of ₹1,538 crores towards employee benefit 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 promotor status.

IDBI Intech[edit]

IDBI Intech Ltd.
TypeSubsidiary
IndustryIT Solutions & Services in Banking and Finance services
FoundedMarch 2000
HeadquartersNavi Mumbai, India
ServicesIT Consulting
IT Services
Outsourcing
Software Products
Number of employees
900 (As on 31 March 2012)
ParentIDBI Bank
WebsiteIDBI Intech

IDBI Intech Ltd.(IIL) is a wholly owned subsidiary of IDBI Bank, established in 2000.[13]

It provides IT related services in the area of Consultancy, System Integration, System implementation & support, Applications & Server hosting and other IT related managed services and specialized training.[14][15]

IDBI Intech has been accredited with ISO 9001:2000 certification for IT-related services including Data Center Management and Call Center, and also Certified IT Security Auditing Organisation with the Indian Computer Emergency Response Team (CERT-In).[16]

Awards and recognitions[edit]

  • IDBI Bank ranked #1197 in the Forbes Global 2000 in May 2013.[17]
  • It received the 'Overall Best Bank' and 'Best Public Sector Bank' awards in the Dun & Bradstreet Banking Awards, 2011.[18]
  • In 2011, it received Banking Technology awards for best use of Business Intelligence and the best Risk Management from Indian Banks Association.[19]

See also[edit]

References[edit]

  1. ^ "About us". IDBI Bank. Retrieved 29 January 2019.
  2. ^ "Contact Us". IDBI Bank. Retrieved 29 January 2019.
  3. ^ "IDBI Group". IDBI Bank. Retrieved 29 January 2019.
  4. ^ India Exim Bank
  5. ^ "IRDAI clears LIC IDBI Bank Deal". economictimes.indiatimes.com. 29 June 2018. Retrieved 1 July 2018.
  6. ^ "About us". IDBI Bank. Retrieved 22 February 2014.
  7. ^ "IDBI Bank Branch & ATM Locator". IDBI Bank. Retrieved 1 February 2020.
  8. ^ "History". IDBI Bank. Retrieved 22 February 2014.
  9. ^ "United Western Bank to merge with IDBI". Rediff.com. 13 September 2006. Retrieved 22 February 2014.
  10. ^ "IDBI Bank". BSEindia.com. Retrieved 22 February 2014.
  11. ^ "IDBI Bank". NSE India. Retrieved 22 February 2014.
  12. ^ a b c "Annual Report 2012-13" (PDF). IDBI Bank. Retrieved 22 February 2014.
  13. ^ IDBI Intech Official Website
  14. ^ IDBI to ramp up IDBI Intech
  15. ^ IDBI Bank wins Asian Banker Technology Implementation Award 2011
  16. ^ http://www.cert-in.org.in/panelofauditors.htm
  17. ^ "IDBI Bank on the Forbes Global 2000 List". Forbes. May 2013. Retrieved 18 February 2014.
  18. ^ "IDBI Bank Wins Dun & Bradstreet Banking Awards 2011 for Overall Best Bank & Best Public Sector Bank". Business Standard. 5 September 2011. Retrieved 22 February 2014.
  19. ^ "IDBI Bank bags IBA's prestigious Banking Technology Awards". Business Standard. 4 March 2011. Retrieved 22 February 2014.

External links[edit]