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Indian government to infuse 45.57B rupees into IDBI Bank

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Indian government to infuse 45.57B rupees into IDBI Bank

The government of India will infuse 45.57 billion rupees into IDBI Bank Ltd. to help the bank return to profitability and normal lending.

IDBI Bank needs a one-time infusion of capital in order to deal with its legacy book, according to a Sept. 3 release from the Ministry of Finance.

The bank has already reduced its nonperforming assets ratio to 8% in June from 18.8% in June 2018. Of the 93 billion rupees of capital the bank needs, its major shareholder Life Insurance Corp. of India will provide 47.43 billion rupees, while the government will provide 45.57 billion rupees.

Following the infusion, IDBI Bank expects to be able to subsequently raise further capital on its own and come out of the central bank's prompt corrective action framework sometime in 2020.

As of Sept. 3, US$1 was equivalent to 72.22 Indian rupees.