IDBI considers universal banking

Mumbai: The IDBI board will meet on 12 November to consider a proposal for converting itself into a universal bank. Some of the options the board will be considering are a reverse merger with a public sector bank or a private bank.

A possible merger with IDBIs subsidiary, IDBI Bank, will also be considered. IDBI had informed the RBI on 31 October that a partner would be finalised in a months time. The Boston Consultancy Group will be making a presentation to IDBI regarding the three possible options and its financial impact on the institution.

Earlier, the IDBI board had almost ruled out the possibility of a merger with IDBI Bank. But now the management will be reconsidering the matter in the next board meeting. IDBI Bank MD Gunit Chadda has gone on record saying that there is no economic rationale in a merger between IDBI and IDBI Bank. IDBI Bank chairman MS Verma is also understood to be averse to the proposal.