Directions: Read the given statement and with that information answer the following question carefully:
The government has held internal preliminary discussions over a possible infusion of fresh capital in debt-laden IDBI by Life Insurance Corporation of India (LIC) but no decision has been taken on selling its stake in the bank to the insurer, said a senior official. LIC would use that amount to capitalize the bank to maintain its capital adequacy ratio. It would not be a stake sale by the government. The government is expected to hold discussions with banking, insurance, and market regulators before taking a final call.
Which of the following can be logically deduced from the statement above?
1
IDBI will need more capital infusion and LIC can put that money towards further strengthening the bank. The government may hold informal consultations with Reserve Bank of India (RBI), Insurance Regulatory and Development Authority of India (IRDA) and market regulator Securities and Exchange Board of India (SEBI).
2
The government had in 2015 announced its intention to transform IDBI Bank on the lines of Axis Bank Issuance of new equity will raise more capital and also dilute the government’s stake in the bank
3
The insurer already has a 10.82% stake in IDBI Bank and would require regulatory clearance to increase this beyond 15%.
4
The government is considering a preferential capital issue by IDBI Bank to bring its holding below 50% as part of plans to transform its fortunes, along the lines of Axis Bank.
5
All can be deduced.