On October 14, the Cabinet Committee on Economic Affairs (CCEA) approved the sale of a 60.72 percent stake in IDBI Bank to 10955230 Canada Inc., a wholly owned subsidiary of Fairfax Financial Holdings, for a staggering ₹52,878 crore. This transaction marks the largest foreign direct investment in India's financial services sector to date.
Under the approved structure, the Government of India will divest 30.48 percent of its stake, while the Life Insurance Corporation of India (LIC) will sell 30.24 percent. Following completion, the government will retain a 15 percent holding, and LIC will hold 19 percent, bringing their combined ownership down from approximately 94 percent to 34 percent.
The winning bid was set at ₹81 per share, exceeding the benchmark valuation of ₹75.99 determined through two independent professional assessments. Finance Minister Nirmala Sitharaman characterized the transaction as a "strategic restructuring" rather than a disinvestment, emphasizing that foreign capital infusion would strengthen the banking ecosystem.
The unions highlighted that IDBI Bank has reported net profits of approximately ₹5,600 crore, ₹7,500 crore, and ₹9,500 crore over the past three financial years—totaling over ₹22,000 crore. The bank also holds public deposits worth approximately ₹3.50 lakh crore.
"Thus, a performing Bank is being sold away," the UFBU circular stated, demanding that the government roll back its decision.
The employees' forum also recalled a parliamentary assurance given during IDBI's conversion into a banking company, when then Finance Minister Jaswant Singh committed that the government's shareholding would remain at a minimum of 51 percent. The unions argue the current sale directly contradicts that promise.
"The government talks about Atmanirbhar, but this important bank with huge public savings is being sold to a foreign investor. This is totally unwarranted and undesirable," the United Forum of Bank Unions stated.
The United Forum of IDBI Bank Officers and Employees echoed this sentiment, arguing that "financial self-reliance requires the capacity to direct credit towards national development and social priorities. Surrendering control over an institution with IDBI's legacy undermines that objective".
The protest is intended as a peaceful yet visible demonstration of opposition. Importantly, the circular does not announce a bank strike or branch closures—banking services will continue, but employees will visibly express their dissent.
"The public deserves evidence that a national asset is not being transferred at a throwaway price," the forum stated.
The government maintains that the deal was conducted transparently. The initial reserve price was set at ₹94.42 per share in FY26, but bids fell short and were rejected. Revised bids were invited, yielding a fair valuation of ₹75.99 per share. Fairfax's winning offer of ₹81 represented a premium of approximately 6.6 percent over the benchmark.
However, market dynamics added another layer of controversy. IDBI Bank shares had rallied 9 percent ahead of the Cabinet announcement, closing at ₹90.40. When the approved price of ₹81 became public, the stock plunged 7 percent in early trading on October 15, as the acquisition price represented a discount of over 10 percent to the previous closing price.
DIPAM Secretary Arunish Chawla added that service conditions are determined by the bank's board and will remain unchanged. Pensions are paid from a dedicated fund, and the same mechanism will continue.
The deal does come with several regulatory conditions. Fairfax, which already holds a 40 percent stake in CSB Bank through a subsidiary, must either merge CSB with IDBI Bank or divest its CSB holding within two years to comply with RBI regulations prohibiting ownership of two banks. Additionally, LIC must reduce its remaining stake in IDBI Bank to 15 percent within two years.
Fairfax's investment will be subject to a three-year lock-in, and IDBI Bank will retain its name for at least three years.
Meanwhile, the United Forum of IDBI Officers and Employees has vowed to mobilise employees and the public through democratic action and to approach the judiciary for appropriate relief. The forum has appealed to parliamentarians, trade unions, and customers to join its campaign to retain IDBI Bank's public-sector character.
As the October 16 protest approaches, the battle over IDBI Bank's future has become a flashpoint in India's broader debate about disinvestment, foreign investment in strategic sectors, and the meaning of economic self-reliance in an increasingly globalized financial landscape
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