The Centre has reached out to the market regulator, Securities and Exchange Board of India (Sebi), seeking a relaxation period of two years in the minimum public (MPS) norms for after its privatisation, reported The Economic Times on Wednesday.

Under the current norms, listed need to have a public of at least 25 per cent within three years of being listed in the . While is already listed, state-run are exempted from the minimum public holding rule.

As the Centre is looking to privatise the bank, after listing it would need to comply with the rule.

The finance ministry inserted a new rule in the public listing norms in August 2021 that exempted listed public sector firms from the public 25 per cent . The Centre and the Life Insurance Corporation of India (LIC), who are categorised as IDBI promoters, hold 94.7 per cent stake in the bank, while 5.3 per cent is with the public.

If does not grant IDBI the exemption, the Centre could also request the market regulator to treat its shareholding in the category of public shareholding to meet MPS criteria.

However, IDBI is a unique case because it’s no longer a state-run entity and yet falls under the minimum public shareholding exemption available to state-run enterprises, an official told ET.

has designated IDBI as a private bank. The government also treats it as a private sector lender,” the official further told ET.

After acquired a majority stake in IDBI, the categorised the firm as a private sector bank for regulatory purposes with effect from January 21, 2019.

The Department of Investment and Public Asset Management (DIPAM) will likely invite expressions of interest (EoIs) for by the end of this month in a bid to complete the privatisation in this fiscal year, reported ET.

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