IDBI Bank sale: Fairfax subsidiary approved as buyer for Rs 52,878 crore

NEW DELHI: The Centre has approved Fairfax Financial Holdings’ subsidiary, M/s 10955230 Canada Inc., as the strategic buyer for IDBI Bank. The proposed transaction is valued at Rs 52,878 crore. The government and LIC will sell a combined 60.72% stake, with the proceeds to be divided between them in proportion to their respective shareholdings.

Government sources said the proposed sale would mark a significant step in the bank’s ownership restructuring, while the Centre and Life Insurance Corporation of India (LIC) would retain stakes of 15% and 19%, respectively, after the transaction.

The government has defended the proposed sale by citing a sharp improvement in the bank’s asset quality and profitability. IDBI Bank’s gross non-performing assets (NPAs) declined from 31.78% in September 2018 to 2.32% in March 2026, while net NPAs fell from 17.30% to 0.15% over the same period.

The bank’s capital adequacy ratio rose from 6.22% in 2018 to 26.65%. It reported a record net profit of Rs 9,513 crore in FY26, while its total business stood at Rs 6.27 lakh crore as of September 30, 2026, registering 18% year-on-year growth, the sources said.

The government infused about Rs 25,000 crore into the bank between 2010 and 2020, according to officials.

On the sale’s impact on customers, the sources said depositors and borrowers would not be affected and that RBI supervision would continue. Deposit insurance cover of up to Rs 5 lakh under the Deposit Insurance and Credit Guarantee Corporation (DICGC) would remain unchanged.

IDBI Bank would also continue to meet the 40% priority sector lending requirement and implement government-backed schemes such as the Pradhan Mantri Jan Dhan Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana, Atal Pension Yojana and Mudra, officials said.

The government has also cited recommendations by past committees and assessments in support of reducing its ownership in public sector banks. These include the 1998 report of the Narasimham Committee, the 2008 report of the committee headed by Raghuram Rajan and a 2009 government-RBI financial sector assessment. Officials said the UPA government did not act on these recommendations.

On the bank’s legacy bad loans, government sources pointed to lending to companies during the UPA years. They cited Kingfisher Airlines, which was sanctioned Rs 860.92 crore in 2009, with Rs 807.82 crore remaining unrecovered, according to the sources. They also cited an exposure of about Rs 3,639 crore to ABG Shipyard and claims of about Rs 9,903 crore relating to Winsome Diamonds and Videocon.

Follow The New Indian Express channel on WhatsApp

Download the TNIE app to stay with us and follow the latest