With Life Insurance Corporation (LIC) becoming a parent company of both IDBI Bank and LIC Housing Finance, either of the subsidiaries will have to wind down its home loan business in the next 20 months, according to the Reserve Bank of India’s (RBI’s) condition while approving the insurance behemoth’s takeover of the erstwhile public sector lender.
In its approval letter dated November 2, 2018, for the acquisition of additional shares by LIC in IDBI Bank, the banking regulator said either of LIC’s associates would have to cease its housing finance business within five years of the date of the approval letter.
Housing finance will be conducted only by one entity, the insurer said, in the draft red herring prospectus (DRHP) for its initial public offering (IPO). The five-year period will end in November 2023.
