1. Establishment : IDBI Bank was established in July 1964 under an Act of Parliament as a wholly-owned subsidiary of the Reserve Bank of India (RBI). Its primary purpose was to provide credit and financial assistance to the growing industrial sector in India.
2. Development Financial Institution (DFI) Era : Initially, IDBI operated as a Development Financial Institution (DFI), focusing on providing long-term finance for industrial projects. It played a crucial role in financing various sectors of the economy, including infrastructure, manufacturing, and small-scale industries.
3. Transformation into a Commercial Bank : In 2004, the Indian government initiated reforms in the banking sector, leading to the transformation of IDBI from a DFI to a commercial bank. This transition was aimed at enhancing its operational flexibility, expanding its customer base, and aligning it with the changing financial landscape.
4. Merger with United Western Bank : In 2006, IDBI Bank acquired United Western Bank, a private sector bank that was facing financial difficulties. This merger helped IDBI Bank expand its branch network and customer base.
5. Public Offering and Listing : In 2010, IDBI Bank launched its Initial Public Offering (IPO), becoming a listed entity on the stock exchanges. This move allowed the bank to raise capital from the public markets to support its growth initiatives.
6. Government's Disinvestment : Over the years, the Indian government gradually reduced its ownership stake in IDBI Bank as part of its disinvestment strategy. This move aimed to diversify ownership and improve corporate governance.
7. Challenges and Restructuring : Like many other banks in India, IDBI Bank faced challenges related to non-performing assets (NPAs) and corporate governance issues. To address these challenges, the government initiated various restructuring measures, including capital infusion and strategic partnerships.
8. Acquisition by LIC : In 2019, the Life Insurance Corporation of India (LIC), which is owned by the Indian government, acquired a majority stake in IDBI Bank, making it a subsidiary of LIC. This move was aimed at revitalizing the bank and strengthening its financial position.
Throughout its history, IDBI Bank has played a significant role in supporting industrial development and economic growth in India. However, it has also faced various challenges typical of the banking sector, requiring constant adaptation and restructuring to remain competitive and sustainable.