Life Insurance Corporation, which is headed for the country’s largest initial public offering (IPO), and the government will exit management control from IDBI Bank.

The top management of LIC will exit from IDBI Bank soon, said DIPAM secretary Tuhin Kanta Pandey. The motion is in the process, he added.

LIC, which is set to launch its Rs 21,000-crore IPO from 4 May to 9 May, is the largest shareholder in IDBI Bank with a holding of 49.24%. The government owns 45.5% of the insurance giant.

“Our position in IDBI Bank is clear. Both LIC and the government will exit from IDBI Bank. We will, at least, exit from the management control. That is the position which is there and the process has been set into motion,” said Pandey in a press conference held to announce LIC’s IPO.

The Cabinet Committee on Economic Affairs (CCEA) had earlier given its mandate to offload 100% shareholding of both the government and LIC with transfer of management control. LIC’s stake will be sold along with the government’s shareholding, it had said, while not elaborating on when this will take place and in how many tranches.

Earlier this month, IDBI Bank sought an approval from its shareholders via postal ballot for a 10-fold increase in the salary of its chief executive officer and managing director Rakesh Sharma, with effect from 19 March 2022. The board proposed that Sharma’s salary, which is currently at Rs 2.62 lakh per month, be raised to Rs 20 lakh per month (Rs 2.4 crore annually).

Sharma got a three-year extension as boss of IDBI Bank, with effect from 19 March 2022.

The government is working on floating an expression of intent for the sale of IDBI Bank. A lack of buyer interest has delayed the government’s plan to sell stake in IDBI Bank, which was earlier a development financial institution.

IDBI Bank became a subsidiary of LIC with effect from 21 January 2019, following the insurance company’s acquisition of an additional 827,590,885 equity shares in the lender. In December 2020, it was classified as an associate company as LIC cut its stake in the bank to 49.24%.