After years of false starts, the sale of IDBI Bank has finally cleared its biggest hurdle. The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, on Wednesday, October 14, approved the sale of a 60.72% stake in the lender to Fairfax Financial Holdings for about Rs 52,878 crore. Once completed, the government says, it will be the largest foreign direct investment ever made in India's financial sector.
Information and Broadcasting Minister Ashwini Vaishnaw briefed the media on the decision, which marks the country's biggest strategic disinvestment since Air India changed hands.
The Deal at a Glance
The buyer is a Fairfax entity registered as 10955230 Canada Inc. The stake being sold comes from the two biggest owners of IDBI Bank – the Government of India and the Life Insurance Corporation (LIC).
| Stake sold | 60.72% of IDBI Bank |
| From the government | 30.48% |
| From LIC | 30.24% |
| Buyer | 10955230 Canada Inc (parent: Fairfax Financial Holdings Ltd) |
| Consideration | Rs 52,877.07 crore (about Rs 52,878 crore) |
| Govt + LIC after deal | 34% combined |
| Approved by | CCEA, chaired by PM Narendra Modi, on October 14, 2026 |
| Expected completion | Before the end of FY 2026-27 |
| Other final bidder | Emirates NBD |
"Once completed, this will be the largest FDI in the financial sector of our economy so far," the government said in its statement.
A Long Road to the Finish Line
IDBI Bank's journey to this point has been anything but smooth. In May 2017, the Reserve Bank of India placed the lender under its Prompt Corrective Action (PCA) framework after its net bad loans crossed 13%. In January 2019, LIC stepped in and bought a controlling 51% stake, after which the RBI reclassified IDBI as a private-sector bank.
The bank recovered steadily and exited PCA in March 2021. Two months later, in May 2021, the Cabinet approved a strategic sale along with transfer of management control. Expressions of interest were invited in October 2022, and bidders cleared Home Ministry security checks and the RBI's "fit and proper" test by July 2024.
Financial bids came in early 2026 from Fairfax and Dubai's Emirates NBD, but the process was paused in March because the offers fell below the reserve price. The government restarted it in April, revised bids arrived in July, and the Cabinet has now picked Fairfax.
Conditions Fairfax Must Meet
The approval comes with strings attached. The deal still needs the necessary regulatory approvals before it closes. Fairfax will also have to make an open offer to IDBI Bank's minority shareholders, as required under market rules. Details of the offer price and size have not yet been announced.
There is one more condition. Fairfax already holds a stake in Kerala-based CSB Bank. Within two years, it will have to either merge CSB Bank with IDBI Bank or sell its holding in CSB. This is meant to keep a single promoter from running two separate banks.
Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said the transaction is expected to be completed before the end of the current financial year.
Who Is Fairfax?
Fairfax Financial Holdings is a Toronto-based insurance and investment group led by Indian-born businessman Prem Watsa. The group has been a long-term investor in India, with holdings spread across financial services, infrastructure and other sectors, including CSB Bank. The IDBI deal would be among its largest bets on the country.
What It Means for Customers and Investors
For IDBI Bank's account holders, nothing changes overnight. Deposits, loans, branches and digital services will continue as usual while the transaction goes through approvals. In the longer run, a private owner with deep pockets could bring fresh capital and a sharper push for growth.
For the government, the deal is a major win for its disinvestment programme, which has often missed targets in recent years. It also sends a strong signal to global investors that India is willing to hand over control of a large lender to a foreign strategic buyer. Many analysts see it as a test case that could open the door to the privatisation of other state-controlled banks.
For LIC, the sale allows the insurer to unlock value from a stake it took on to rescue the bank in 2019, while still keeping a share in the restructured entity alongside the government.
What Happens Next
The next steps are regulatory approvals, the open offer to minority shareholders and the formal transfer of shares and management control. Investors will be watching closely for the open offer price, which will decide how much retail shareholders can expect. If all goes to plan, IDBI Bank will begin its new life under Fairfax before March 31, 2027.
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