IDBI Bank stake sale to Fairfax raises job security concerns; Finance Ministry assures staff protection

Canada-based Fairfax Financial Holdings is set to acquire a controlling stake in financially troubled IDBI Bank for ₹52,878 crore after the Union Cabinet approved the deal on Wednesday, October 14.

The strategic sale of IDBI Bank has been in the works since 2022, with the government and the Life Insurance Corporation of India (LIC) together selling a 60.72% stake in the lender and transfer management control.

With this, the government’s stake in the bank will fall from 45.5% to 15%, while LIC's holding with decline from 49.2% to 19%. Both will withdraw their nominees from the Board and become public shareholders, as per the official release.

Quick answers to key questions

•5 QUESTIONS

1

What has the Finance Ministry said about IDBI Bank employees after the Fairfax stake sale?⌵

The ministry said the interests of serving and retired employees have been protected in the sale process. It has not provided specific details about employee arrangements.

2

Does the IDBI Bank sale announcement specify what will happen to employees’ jobs?⌵

No specific job or employment terms were included in the documents described in the article. The Finance Ministry said employees’ interests were protected, and further information was awaited.

3

What stake in IDBI Bank is Fairfax set to acquire, and for how much?⌵

Fairfax Financial Holdings is set to acquire a 60.72% controlling stake in IDBI Bank for ₹52,878 crore, following Cabinet approval.

4

How will the IDBI Bank sale change the government’s and LIC’s shareholdings?⌵

After the sale, the government’s holding is expected to fall from 45.5% to 15%, and LIC’s from 49.2% to 19%. Both will withdraw their nominees from the board and become public shareholders.

5

Why was the IDBI Bank stake sale delayed?⌵

The process was delayed by regulatory approvals and prospective bidders’ due diligence. It was also put on hold in March 2026 after financial bids fell below the government’s reserve price.

The transaction had been delayed due to regulatory approvals and completion of the due diligence process by prospective bidders, as per media reports.

After the announcement became public, people took to social media to question the government about staff welfare and job security, particularly for employees who had joined IDBI Bank through the public-sector bank exam and are now facing a change in ownership and management control.

Responding to one such query, the Finance Ministry said that the IDBI Bank stake sale went through a transparent and fair bidding process and that the interests of employees have been protected.

“The entire process went through transparent and fair bidding process. The interests of serving and retired employees have also been protected in the process,” the government commented on X (formerly Twitter).

The ministry also shared FAQs providing further details about the deal. However, the documents did not address anything about employees or retired staff. More information about this subject is awaited.

In July this year, the United Forum of IDBI Officers & Employees expressed “profound concern” over the government's move to sell its controlling stake in the lender to Fairfax and sought a parliamentary review of the sale, according to a news report by Business Standard.

The Forum urged the government to make the deal's full proposal public, review the decision in light of India’s “long-term financial and economic sovereignty”, honour assurances made before Parliament during the bank’s restructuring, and hold a parliamentary discussion before taking any irreversible decision.

It also called on the government to protect the interests of employees, depositors and customers while preserving public ownership of strategically important banking institutions serving national developmental objectives.

IDBI Bank, which had been grappling with poor financial health for years, was placed under a Prompt Corrective Action (PCA) framework in 2017. Two years later, LIC infused ₹21,624 crore into the lender in exchange for preferential shares, acquiring a controlling stake in the bank.

This reduced the government’s stake to below 51%, prompting the Reserve Bank of India (RBI) to reclassify IDBI Bank as a private-sector bank.

Fairfax will still be required to present its credentials to RBI in accordance with the fit and proper assessment conducted at the expression of interest (EoI) stage and submit its roadmap for the compliance of regulatory conditions prescribed therein. Once completed, this will be the largest FDI in the financial sector of our economy so far, the government noted in the release.

Shares of IDBI Bank closed ₹90.44 rupees ​per share, up 9% on the day. The announcement came after the close of trade.

Eshita Gain is a digital journalist at Mint, where she joined in May 2025. She writes on corporate developments, personal finance, markets, and business trends, with a focus on delivering timely and relevant stories to a broad audience. <br><br> While her core beat lies in business and finance, she is not confined to a single niche and frequently explores stories across domains, including international relations and policy developments. <br><br> She holds a postgraduate diploma in business and financial journalism by Bloomberg from the Asian College of Journalism (ACJ), Chennai. During her time there, she received rigorous training in tracking financial data, interpreting corporate filings, and reporting on business developments. She has pursued her graduation from St. Joseph’s University, Bengaluru in a multi-disciplinary course. Her majors included Journalism, International Relations, peace and conflict studies. <br><br> Eshita has previously worked in digital marketing, which enables her to write SEO friendly copies that are clear and engaging. <br><br> Her primary interest lies in breaking down complex subjects and writing clear, accessible copies that inform readers. She aims to bridge the gap between technical financial language and everyday understanding. Outside the newsroom, Eshita enjoys reading non-fiction, and exploring new places, constantly seeking fresh perspectives and stories beyond headlines.

Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

More

✕

Wait for it…

Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.