The Cabinet on Wednesday (October 14, 2026) approved the sale of a 60.72% stake in IDBI Bank to Fairfax Financial Holdings for ₹52,878 crore, in the country’s biggest strategic disinvestment since the sale of Air India and potentially opening a new chapter in the privatisation of state-controlled banks.

The decision by the Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi, brings to a close a process that has stretched over five years, marking a significant step in the government’s efforts to reduce its ownership of state-run assets and attract private capital into the financial sector.

“Once completed, this will be the largest FDI in the financial sector of our economy so far,” the government said in a statement.

Information and Broadcasting Minister Ashwini Vaishnaw also briefed the media about the Cabinet decision on the IDBI Bank’s strategic restructuring.

He said the government and LIC will together hold a 34% stake in the restructured entity.

The proposed sale of a combined 60.72% stake held by the government and Life Insurance Corporation of India (LIC) would transfer control of the lender to Fairfax, subject to the completion of the transaction and requisite regulatory approvals.

“The CCEA …approved M/s 10955230 Canada Inc (parent entity M/s Fairfax Financial Holdings Ltd) as the strategic buyer for this transaction for a purchase consideration of ₹52,877.07 crore for the acquisition of 60.72 per cent stake in IDBI Bank, comprising 30.48 per cent equity held by the GoI and 30.24 per cent by the LIC,” the statement said.

Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said the deal will be completed before the end of the current fiscal.

Fairfax will have to also make an open offer to the minority shareholders.

Fairfax, which holds a stake in CSB, will have to either merge it with IDBI Bank or exit the holding within two years.

The government is evaluating the financial bids for strategic stake sale in IDBI Bank and the process is moving at a steady pace, government sources said on Friday (September 25, 2026).

In July, billionaire investor Prem Watsa-backed Fairfax Financial Holdings and Dubai-based Emirates NBD had put in their revised bids to buy 60.72% in IDBI Bank, sources had earlier said.

The strategic disinvestment of IDBI Bank is moving at a steady pace. The government is evaluating the financial bids submitted by the interested investors, the sources said, without disclosing any further details.

Both the bidders have experience in the Indian banking sector, with Dubai-based Emirates NDB acquiring majority stake in RBL Bank earlier this year and Fairfax Financial holding a 40% stake in the private-sector CSB Bank.

The bidders already have security clearance from Ministry of Home Affairs (MHA) and ‘Fit and Proper’ assessment from the Reserve Bank of India.

This is the second time that the interested bidders have put in financial bids for buying stake in IDBI Bank, in which the government and Life Insurance Corporation (LIC) are together looking to sell 60.72%.

An Expression of Interest (EoI) for the strategic sale was floated in October 2022, and after regulatory clearances and due diligence, financial bids came in on February 6, 2026. However, the bids by Fairfax Financial Holdings and Emirates NBD came in below the reserve price decided by the Inter-ministerial group on disinvestment headed by secretaries in the finance ministry. The government then put the strategic sale process on hold.

The strategic sale process restarted this financial year and the government invited revised financial bids from the two suitors early in July. The revised financial bids came in on July 13, 2026.

Currently, the government and state-owned LIC together hold 94.71% stake in IDBI Bank. The government owns 45.48%, while LIC holds 49.24% in the lender.

Of this, the government and LIC are looking to sell 60.72% — the Centre’s 30.48 and LIC’s 30.24% stake, respectively.