India's Union Cabinet on Wednesday approved the sale of a combined 60.72% stake in IDBI Bank to a Fairfax Financial Holdings-backed entity for ₹52,878 crore, The Hindu and Mint reported. The government said it would be the largest foreign direct investment in the financial sector in India's history, The Hindu reported. Finance Minister Nirmala Sitharaman called it the largest foreign direct investment in India's financial sector to date, Mint reported.

The government will sell 30.48% of the bank and Life Insurance Corporation of India, or LIC, will sell 30.24% to Fairfax-backed 10955230 Canada Inc., Mint reported. After the sale, the government will hold 15% and LIC about 19%, The Hindu and Mint reported. The government now holds 45.5% and LIC 49.2%, The Hindu reported.

The winning bid was ₹81 per share, The Hindu and Mint reported. That was above the benchmark price of ₹75.99, Mint reported. "The winning best offer bid of ₹81 per share was above the benchmark price, as well as the fair value estimates of both the independent valuation agencies," said Arunish Chawla, secretary of the Department of Investment and Public Asset Management, according to Mint.

Before the deal closes, the Fairfax-backed buyer must submit its credentials to the Reserve Bank of India and give a plan for meeting regulatory conditions, Mint reported. The deal is expected to be completed in the current fiscal year, Mint reported. Fairfax, which holds 40% of CSB Bank, has two years to merge CSB Bank with IDBI Bank or exit it, Mint reported.

IDBI Bank was placed under the RBI's Prompt Corrective Action framework in 2017, and LIC took control of it in January 2019, The Hindu reported. Its gross non-performing asset ratio fell from 31.8% in September 2018 to 2.3% as of March 2026, The Hindu reported. "No depositor or borrower is affected by this strategic restructuring," a Finance Ministry official said on condition of anonymity, according to The Hindu.

The United Forum of IDBI Officers and Employees opposed the decision and called for an immediate suspension of further steps, Mint reported. Sitharaman said employees' service conditions and pensioners' interests will remain fully protected, Mint reported.

What we know: India has approved selling control of IDBI Bank to a Fairfax-backed buyer at ₹81 a share.
What we don't: When the Reserve Bank of India will sign off and whether the employee union's opposition will slow the deal.