The government’s long-running effort to privatise IDBI Bank has culminated in the approval of a ₹52,878 crore deal under which Fairfax Financial Holdings will acquire a 60.72% controlling stake in the lender.
New Delhi, October 14 — The strategic disinvestment of IDBI Bank has reached its final stage after a nine-year journey that began with the lender being placed under the Reserve Bank of India’s Prompt Corrective Action framework in 2017.
In May 2017, the RBI placed IDBI Bank under the PCA framework after the lender breached regulatory thresholds for capital adequacy, asset quality, return on assets and leverage. Its net non-performing assets had risen above 13% in March 2017.
A major turning point came in January 2019, when Life Insurance Corporation of India acquired a 51% controlling stake in the bank. Following the transaction, the RBI classified IDBI Bank as a private-sector bank for regulatory purposes.
The bank was removed from the PCA framework in March 2021 after nearly four years, following an improvement in its financial performance. Soon after, LIC approved a proposal to reduce its holding through equity dilution alongside the government’s strategic disinvestment plan.
In May 2021, the Cabinet Committee on Economic Affairs approved the strategic sale of stakes held by the government and LIC, including a transfer of management control.
The formal sale process moved ahead in October 2022, when the government invited expressions of interest for a 60.72% stake, comprising a 30.48% government holding and 30.24% held by LIC.
Multiple prospective bidders submitted expressions of interest in January 2023, while security clearances and the RBI’s fit-and-proper assessments were completed by July 2024.
The government invited financial bids in January 2026, with offers received from Fairfax Financial Holdings and Dubai-based Emirates NBD. However, the process was put on hold in March after the bids came in below the reserve price.
The disinvestment was revived in April, followed by fresh financial bids in July. Revised offers were subsequently submitted by both Fairfax and Emirates NBD.
In October 2026, the Cabinet Committee on Economic Affairs approved Fairfax’s acquisition of the 60.72% controlling stake for ₹52,878 crore. After completion of the transaction, the government and LIC are set to retain a combined 34% stake in IDBI Bank.
The deal marks the conclusion of one of India’s longest-running strategic disinvestment processes in the banking sector and represents a significant transfer of control from public-sector shareholders to a private investor.
