INSUBCONTINENT EXCLUSIVE:
LIC told the court that the amount it was investing in the bank was just one per cent of its entire fundsThe Delhi High Court Friday
dismissed an appeal against its single judge order rejecting a plea challenging Life Insurance Corporation (LIC)'s move to acquire a 51 per
cent stake in Industrial Development Bank of India (IDBI).A bench of Chief Justice Rajendra Menon and Justice VK Rao said the single judge
had considered all aspects before denying any relief to All India IDBI Officers Association, which had opposed LIC's move on the ground that
change in shareholding could take away IDBI's public sector bank status.The association, in its appeal, told the bench that LIC's move to
acquire a 51 per cent stake in IDBI violated provisions of the Insurance Act.The court, however, did not accept the contention and said if
there was any violation of the Insurance Act, the association has to approach the Insurance Regulatory and Development Authority (IRDAI)."We
cannot hold any enquiry into whether the Insurance Act was violated
Go to IRDAI," the bench said.Meanwhile, LIC told the court that the amount it was investing in the bank was just one per cent of its entire
funds and assured the bench that interests of its policyholders are protected.The association was concerned that taking away public sector
bank status of IDBI could affect the employment conditions of its staff.The bench was of the view that this issue has been addressed by the
single judge in his decision of December 17.LIC had argued before the single judge that it wanted to acquire a 51 per cent stake in IDBI as
since 2000, the state-run insurance company has been toying with the idea of having banking operations.It had said it had in the past made
several attempts to have a bank of its own, but its endeavours "failed" as "nothing fructified".IDBI, in which government holds a 85.96 per
cent stake, had posted a net loss of Rs 2,409.89 crore in the quarter ended June 2018
It had posted a gross non-performing asset (NPA) of about Rs 57,807 crore.The association had claimed before the single judge that the
change in shareholding was not in public interest as it "exposes the investments made by the public in IDBI and corrodes the ability of the
LIC to pay back its policy holders since it will have to invest an amount of Rs 13,000 crore to acquire the 51 per cent stake".
