The government plans to sell its residual stake in IDBI Bank, which at current market prices could yield over Rs 18,000 crore.

This was announced by Union finance minister Nirmala Sitharaman in the Union budget for 2020-21 on Saturday. Pointing out that over the last few years the government has taken concrete steps to make the country’s banking system robust, she said there was a need for greater private capital.

“It is proposed to sell the balance holding of the Government of India in IDBI Bank to private, retail and institutional investors through the stock exchange,” she added.

After her announcement, shares of the lender zoomed 10.03 per cent, or Rs 3.40, to settle at Rs 37.30. However, its officers’ association said any move to change the service conditions of the employees will be opposed.

For the quarter ended December 31, 2019, while the government held 47.11 per cent through 4,88,98,71,903 shares, the Life Insurance Corporation (LIC) is its largest shareholder with a stake of 51 per cent.

“As long as our service contract conditions are not changed, we do not have any issues with the move. We will seek a written assurance on this,” Vithal Koteswara Rao, general secretary of the IDBI Bank Officers Association, told PTI.

IDBI Bank was set up as a Development Financial Institution in 1964. It was converted to a bank in 2004. In January 2019, LIC was asked to acquire a 51 per cent controlling stake in the bank.