The Cabinet Committee on Economic Affairs (CCEA) approved on Wednesday, 14 October, the strategic sale of a 60.72 % stake in IDBI Bank to Fairfax Financial Holdings for ₹52,878 crore. The transaction ends a five‑year process that began in 2022 and was stalled earlier this year when bids fell below the government’s reserve price. The government and Life Insurance Corporation of India (LIC) will jointly retain a 34 % stake in the restructured entity, selling a 30.48 % stake held by the government and a 30.24 % stake held by LIC. The deal is described as the largest FDI in the financial sector so far.

Fairfax, led by Canadian billionaire Prem Watsa, will pay ₹81 per share, exceeding the benchmark fair value of ₹75.99 set by two independent valuation agencies, according to an official statement. The purchase price represents a premium over the assessed value, reflecting Fairfax’s confidence in the bank’s recovery trajectory. The transaction marks the largest in the banking space and a milestone in the government’s long‑delayed effort to privatise IDBI Bank and reduce state ownership of commercial enterprises. The sale process began in 2022 and faced a setback earlier this year when initial bids fell below the government’s reserve price.

The government said that once completed, the deal would be the largest foreign direct investment in the financial sector of the economy so far. Finance Minister Nirmala Sitharaman described the transaction as a “milestone”, adding that the bank’s recovery had been supported and that the infusion of FDI would enable its next phase of growth while retaining a minority stake. The transaction still requires approval from the Reserve Bank of India, which will conduct a “fit and proper” assessment, as well as from the Competition Commission of India and other statutory authorities. Fairfax must present its credentials to the RBI and submit a roadmap for meeting the regulator’s requirements before the sale can be finalised.

Fairfax will have up to 15 years to comply with the RBI’s conditions, while a five‑year lock‑in period will apply to the promoter, according to Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla. The new promoter must also retain the IDBI name, brand and customer relations for at least three years. Chawla said employees need not worry, and management transfer has been discussed with all stakeholders. Fairfax currently holds a 40 % stake in Kerala‑based CSB Bank and will have to either merge with IDBI or exit the South‑India‑based lender. The transaction will also require the promoter to meet regulatory compliance over the stipulated period.

LIC will also have to reduce its stake from 19 % in IDBI Bank to 15 % within two years. After the transaction, which is likely to be completed before the end of FY27, the government will exit from the IDBI Bank board. The sale process, first announced in 2022, was shelved in March after bids fell short of the expected sale price. As of June 2026, the lender’s total assets stood at ₹4.44 lakh crore, with a gross bad loan ratio of 2.3 % compared to nearly 32 % in September 2018. IDBI operates more than 2,000 branches across India.

On Wednesday, IDBI Bank shares settled at ₹90.39 apiece on the National Stock Exchange, rising 8.98 % after market hours. Since the beginning of the year, the shares have fallen 13 %, while on a year‑on‑year basis the stock has slipped 1.5 %. Over a five‑year period, however, the share price has surged nearly 45 %. According to NSE data as of 14 October 2026, the private‑sector bank’s total market capitalisation stands at ₹97,190.96 crore. These figures reflect the market’s reaction to the government’s approval of the sale and the anticipated infusion of foreign capital.