Union Finance and Corporate Affairs Minister Nirmala Sitharaman

The Union Cabinet on Wednesday approved the sale of a 60.72 per cent stake in IDBI Bank to Canada-based Fairfax Financial Holdings Ltd. This is the biggest foreign direct investment in India’s financial sector till date, involving an amount of over ₹52,000 crore.

“The Cabinet Committee on Economic Affairs (CCEA) in its meeting held on October 14 approved Canada Inc. (parent entity Fairfax Financial Holdings Ltd.) as the strategic buyer for this transaction for a purchase consideration of ₹52,878 crore for the acquisition of 60.72 per cent stake in the IDBI Bank Ltd,” a Finance Ministry statement said.

Under the process, the winning bid was ₹81 per share. The government is offloading 30.48 per cent of its stake and expected to get over ₹26500 crore, while LIC to sell 30.24 per cent and likely to get over ₹26,300 crore. The deal is expected to be completed by the end of the fiscal year. After the completion of the deal, the government will have residual shareholding of 15 per cent and the LIC will have 19 per cent. Neither the government nor the LIC will have seat on the board of IDBI Bank. Also, they will not have any contingent liability. LIC will have to dilute 4 per cent stake in IDBI bank within two years to retain ownership of LIC Housing Finance.

Strategic sale

Assuring the employees that the strategic sale has no material impact on their well-being, Finance Minister Nirmala Sitharaman said, “during the last one and half year, DIPAM (Department of Investment and Public Asset Management) Secretary talked to every union. Employees have nothing to worry.” Adding to this, DIPAM Secretary Arunish Chawla said that service conditions of employees are determined by the board and they will remain the same. Pension is paid out of a dedicated fund and the same mechanism will continue

RBI regulations prescribe that a company cannot hold ownership of two banks. As on date, FIH Mauritius Investments Ltd a wholly owned subsidiary of Fairfax India Holdings Corporation and holds 40 per cent in CSB Bank (Formerly known as Catholic Syrian Bank). Fairfax has been given two years’ time either to merge CSB with IDBI Bank or offload its holding in CSB. Also, Fairfax will have five-year lock-in for its holding in IDBI Bank. However, going by the RBI regulation, Fairfax has to bring down its holding in the IDBI bank to 24 per cent.

According to a Finance Ministry statement, the successful bidder will be required to present its credentials to the Reserve Bank of India in accordance with the fit and proper assessment conducted at the EoI stage and submit its roadmap for the compliance of regulatory conditions prescribed therein.

“Having supported the bank’s recovery, we are now enabling its next phase of growth through the infusion of foreign direct investment while retaining a minority stake. This will not only strengthen the banking ecosystem but also help banking services surpass global benchmarks,” Sitharaman said, adding that it reinforces that India’s growth story is strong, its economy is resilient, and the government’s commitment to reform is unwavering.

“With an unshakable resolve toward economic transformation, we are shaping a future-ready financial sector dedicated to empowering customers, backing entrepreneurs, and fuelling the vision of a Viksit Bharat,” she said in a social media post.

Published on October 14, 2026