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The IDBI Bank Limited (IDBI Bank or IDBI) is a
Scheduled Commercial Bank Scheduled Banks in India refer to those banks which have been included in the Second Schedule of Reserve Bank of India Act, 1934. Reserve Bank of India (RBI) in turn includes only those banks in this Schedule which satisfy all the criteria laid ...
under the ownership of
Life Insurance Corporation of India The Life Insurance Corporation of India (LIC) is an Indian Public Sector Undertakings in India, public sector life insurance company headquartered in Mumbai. It is India's largest insurance company as well as the largest institutional investor ...
(LIC) and
Government of India The Government of India (ISO 15919, ISO: Bhārata Sarakāra, legally the Union Government or Union of India or the Central Government) is the national authority of the Republic of India, located in South Asia, consisting of States and union t ...
. It was established by
Government of India The Government of India (ISO 15919, ISO: Bhārata Sarakāra, legally the Union Government or Union of India or the Central Government) is the national authority of the Republic of India, located in South Asia, consisting of States and union t ...
as a wholly owned subsidiary of Reserve Bank of India in 1964 as Industrial Development Bank of India, a
Development Finance Institution Development finance institution (DFI), also known as a Development bank, is a financial institution that provides risk capital for economic development projects on a non-commercial basis. DFIs are often established and owned by governments or ...
, which provided financial services to industrial sector. In 2005, the institution was merged with its subsidiary commercial division, IDBI Bank, and was categorised as "Other Public Sector Bank" category. Later in March 2019,
Government of India The Government of India (ISO 15919, ISO: Bhārata Sarakāra, legally the Union Government or Union of India or the Central Government) is the national authority of the Republic of India, located in South Asia, consisting of States and union t ...
asked LIC to infuse capital in the bank due to high NPA and capital adequacy issues and also asked LIC to manage the bank to meet the regulatory norms. Consequent upon LIC acquiring 51% of the total paid-up equity share capital, the bank was categorised as a 'Private Sector Bank' for regulatory purposes by
Reserve Bank of India Reserve Bank of India, abbreviated as RBI, is the central bank of the Republic of India, and regulatory body responsible for regulation of the Indian banking system and Indian rupee, Indian currency. Owned by the Ministry of Finance (India), Min ...
with effect from 21 January 2019. IDBI was put under Prompt Corrective Action of the Reserve Bank of India and on 10 March 2021 IDBI came out of the same. At present direct and indirect shareholding of
Government of India The Government of India (ISO 15919, ISO: Bhārata Sarakāra, legally the Union Government or Union of India or the Central Government) is the national authority of the Republic of India, located in South Asia, consisting of States and union t ...
in IDBI Bank is approximately 95%, which Government of India (GoI) vide its communication F.No. 8/2/2019-BO-II dated 17 December 2019, has clarified and directed all Central/State Government departments to consider IDBI Bank for allocation of Government Business. Many national institutes find their roots in IDBI like
SIDBI Small Industries Development Bank of India (SIDBI) is the apex regulatory body for overall licensing and regulation of Small and medium-sized enterprises, micro, small and medium enterprise finance companies in India. It is under the jurisdicti ...
, EXIM,
National Stock Exchange of India National Stock Exchange of India Limited, also known as the National Stock Exchange (NSE), is an Indian stock exchange based in Mumbai. It is the List of stock exchanges, 5th largest stock exchange in the world by total market capitalization, ...
,
SEBI The Securities and Exchange Board of India (SEBI) is the regulatory body for securities and commodity market in India under the administrative domain of Ministry of Finance within the Government of India. It was established on 12 April 1988 a ...
,
National Securities Depository Limited National Securities Depository Limited (NSDL) is an Indian central securities depository, based in Mumbai. It was established in August 1996 as the first electronic securities depository in India with national coverage. It was established based ...
. Presently, IDBI Bank is one of the largest Commercial Banks in India. The bank has an aggregate balance sheet size of . It has 2,104 Retail Banking Branches and 3,112 ATMs, 24 Banking Outlet- Fixed BC, spreading all over India as of 31 March 2025, including one overseas branch in
Dubai Dubai (Help:IPA/English, /duːˈbaɪ/ Help:Pronunciation respelling key, ''doo-BYE''; Modern Standard Arabic, Modern Standard Arabic: ; Emirati Arabic, Emirati Arabic: , Romanization of Arabic, romanized: Help:IPA/English, /diˈbej/) is the Lis ...
, 58 e-lounges and 1,534 Centres . , LIC holds 49.24% shareholding and the
Government of India The Government of India (ISO 15919, ISO: Bhārata Sarakāra, legally the Union Government or Union of India or the Central Government) is the national authority of the Republic of India, located in South Asia, consisting of States and union t ...
holds 45.48%, with LIC being in control of the management of the bank.


History


Overview of development banking in India

Development Banking emerged after the
Second World War World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...
and the
Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...
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 A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mone ...
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 The National Bank for Agriculture and Rural Development (NABARD) is an All India Development Financial Institution (DFI) and an apex Supervisory Body for overall supervision of Regional Rural Banks, State Cooperative Banks and District Central ...
, NHB and
SIDBI Small Industries Development Bank of India (SIDBI) is the apex regulatory body for overall licensing and regulation of Small and medium-sized enterprises, micro, small and medium enterprise finance companies in India. It is under the jurisdicti ...
were set up to meet the long-term financing requirements of industry and agriculture.


Formation of Industrial Development Bank of India (IDBI)

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 Reserve Bank of India, abbreviated as RBI, is the central bank of the Republic of India, and regulatory body responsible for regulation of the Indian banking system and Indian rupee, Indian currency. Owned by the Ministry of Finance (India), Min ...
. In 1976, the ownership of IDBI was transferred to the Union government 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. 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.
Some of the institutions built with the support of IDBI are the
Securities and Exchange Board of India The Securities and Exchange Board of India (SEBI) is the Regulatory agency, regulatory body for securities and commodity market in India under the administrative domain of Ministry of Finance (India), Ministry of Finance within the Government ...
(SEBI),
National Stock Exchange of India National Stock Exchange of India Limited, also known as the National Stock Exchange (NSE), is an Indian stock exchange based in Mumbai. It is the List of stock exchanges, 5th largest stock exchange in the world by total market capitalization, ...
(NSE), the
National Securities Depository Limited National Securities Depository Limited (NSDL) is an Indian central securities depository, based in Mumbai. It was established in August 1996 as the first electronic securities depository in India with national coverage. It was established based ...
(NSDL), the
Stock Holding Corporation of India Limited Stock Holding Corporation of India Limited (StockHolding) is an Indian custodian and depository participant, based in Mumbai, Maharashtra. StockHolding was established in 1986 as a public limited company and is a subsidiary of IFCI. StockHoldi ...
(SHCIL), the Credit Analysis & Research Ltd, the Exim Bank (India), the
Small Industries Development Bank of India Small Industries Development Bank of India (SIDBI) is the apex regulatory body for overall licensing and regulation of micro, small and medium enterprise finance companies in India. It is under the jurisdiction of Ministry of Finance, Governme ...
(SIDBI) and the Entrepreneurship Development Institute of India.


Conversion of IDBI into a commercial bank

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 Reserve Bank of India, abbreviated as RBI, is the central bank of the Republic of India, and regulatory body responsible for regulation of the Indian banking system and Indian rupee, Indian currency. Owned by the Ministry of Finance (India), Min ...
incorporated IDBI as a 'scheduled bank' under the ''RBI Act, 1934''. The commercial banking arm, IDBI Bank, was merged into IDBI in 2005.


Direct government intervention

The merger was expected to streamline operations of the bank. However, IDBI continued to base its policy towards industrial sector like the erstwhile IDBI entity did. This resulted in the retail business of the bank to be limited to 13 percent of its total business. , the total Non Performing Assets (NPA) rose to and were about 28 percent of its total loans. This was the highest among Indian banks. The Union government intervened, with
Life Insurance Corporation The Life Insurance Corporation of India (LIC) is an Indian public sector life insurance company headquartered in Mumbai. It is India's largest insurance company as well as the largest institutional investor with total assets under management wo ...
bailing out the bank with an infusion of crores. On 29 June 2018, 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%. LIC completed the acquisition of 51% controlling stake on 21 January 2019, with a total investment of crores.


Operations


Acquisition of United Western Bank

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.


Strategic disinvestment to LIC

LIC of India completed the acquisition of 51% controlling stake in the bank in January 2019, making it the majority shareholder. Subsequent to the enhancement of equity stake by LIC of India, Reserve Bank of India has clarified via press release on 14 March 2019, that IDBI Bank stands re-categorised as a private sector bank, with retrospective effect from 21 January 2019. LIC took over the management control of the bank while the Union government, categorised as a promoter.


Listings and shareholding

IDBI Bank's equity shares are listed on
Bombay Stock Exchange BSE Limited, also known as the Bombay Stock Exchange (BSE), is an Indian stock exchange based in Mumbai. It is the 6th largest stock exchange in the world by total market capitalization, exceeding $5 trillion in May 2024. Established with t ...
and the
National Stock Exchange of India National Stock Exchange of India Limited, also known as the National Stock Exchange (NSE), is an Indian stock exchange based in Mumbai. It is the List of stock exchanges, 5th largest stock exchange in the world by total market capitalization, ...
. , the Union government held 45.48% shares in IDBI Bank, while LIC held 49.24% and the remaining is held by non-promoters.


Employees

As of 1 September 2023, the bank had 18,283 employees, out of which 197 were employees with
disabilities Disability is the experience of any condition that makes it more difficult for a person to do certain activities or have equitable access within a given society. Disabilities may be cognitive, developmental, intellectual, mental, physica ...
. The average age of bank employees on the same date was 34 years. 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. IDBI Intech Ltd. (IIL) is a wholly owned subsidiary of IDBI Bank, established in 2000. It provides IT related services in the areas of
Consultancy A consultant (from "to deliberate") is a professional (also known as ''expert'', ''specialist'', see variations of meaning below) who provides advice or services in an area of specialization (generally to medium or large-size corporations). Con ...
, System Integration, System implementation & support, Applications & Server hosting and other IT related managed services and specialized training. IDBI Intech has been accredited with ISO 9001:2000 certification for IT-related services including Data Centre Management and Call Centre, and also Certified IT Security Auditing Organisation with the
Indian Computer Emergency Response Team The Indian Computer Emergency Response Team (CERT-In or ICERT) is an office within the Ministry of Electronics and Information Technology of the Government of India. It is the nodal agency to deal with cyber security incidents. It strengthens se ...
(CERT-In).


Awards and recognitions

* IDBI Bank ranked #1197 in the
Forbes Global 2000 The ''Forbes'' Global 2000 is an annual ranking of the top 2000 public companies in the world, published by: sales, profit, assets and market value. The list has been published annually since 2003. By country Forbes Global 2000 as of 2023: ...
in May 2013. * It received the 'Overall Best Bank' and 'Best Public Sector Bank' awards in the Dun & Bradstreet Banking Awards, 2011. * In 2011, it received Banking Technology awards for best use of Business Intelligence and the best Risk Management from Indian Banks Association.


COVID-19 Moratorium

IDBI Bank was one of the banks to apply an automatic moratorium or automatic relief on loan accounts during the COVID-19 pandemic, without the consent of the customers. Customers world have to send an email to opt out of the moratorium. Ultimately, customers would end up paying more than what they were initially supposed to pay. This move could be considered to be highly unethical on part of such a reputed bank.


See also

*
Banking in India Modern banking in India originated in the mid of 18th century. Among the first banks were the Bank of Hindustan, which was established in 1770 and liquidated in 1829–32; and the General Bank of India, established in 1786 but failed in 1791. ...
*
Indian Financial System Code The Indian Financial System Code (IFS Code or IFSC) is an alphanumeric code that facilitates electronic funds transfer in India. A code uniquely identifies each bank branch participating in the three main Payment and settlement systems in India: th ...
*
List of companies of India India is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area, the List of countries and dependencies by population, second-most populous country (with over Demographics of India, 1.4 b ...
*
List of national development banks A national development bank is a development bank created by a country's government that provides financing for the purposes of economic development of the country. Africa * Botswana: National Development Bank of Botswana (NDB Botswana) * Ethiopia ...


References


External links

* {{DEFAULTSORT:Idbi Bank Banks established in 1964 Banks based in Mumbai Indian companies established in 1964 Private sector banks in India Life Insurance Corporation 1964 establishments in Maharashtra Companies listed on the National Stock Exchange of India Companies listed on the Bombay Stock Exchange