Fairfax to Acquire 60% of IDBI Bank in India's Largest Banking FDI Deal

The Indian Cabinet Committee on Economic Affairs has given the green light for Fairfax Financial Holdings of Canada to acquire a 60.72% stake in IDBI Bank Ltd—30.48% from the government and 30.24% from LIC—for ₹52,878 crore, marking the largest foreign direct investment in the nation's financial sector. The first disinvestment round was cancelled in March 2026 after bids fell short of the reserve price, but revised offers received by July 2026 led to this approval.

Fairfax plans to combine IDBI Bank with its existing holdings in Go Digit Insurance and IIFL Capital Services, forming a sizable integrated financial group, while also holding a 40% stake in CSB Bank Ltd, whose future role remains uncertain. The decision underscores a liberalisation trend, as the RBI has progressively raised foreign ownership caps and granted case-by-case exemptions, exemplified by earlier foreign takeovers of Catholic Syrian Bank, stakes in Yes Bank and RBL Bank.

IDBI Bank, placed under Prompt Corrective Action in 2017 due to high NPAs, has since turned profitable, reduced bad loans to 2.12% gross and 0.17% net, and posted a capital adequacy ratio of 27.1%, positioning it for growth without fresh capital. The transaction is expected to close by March 2027 pending all regulatory approvals.