India has approved the ₹52,878-crore sale of a 60.72% controlling stake in IDBI Bank to Canada’s Fairfax Financial Holdings. Bank unions and opposition parties oppose the deal, calling it privatisation and raising concerns over foreign control, valuation and job security. The government says it is a strategic restructuring, with the Centre and LIC retaining a combined 34% stake.
India’s decision to sell control of IDBI Bank to Canada’s Fairfax Financial Holdings has triggered strong resistance from bank employees, unions and opposition parties, who say the ₹52,878-crore transaction amounts to the privatisation and “foreignisation” of a profitable public-sector lender.
Why critics object
The United Forum of IDBI Officers & Employees has demanded that the sale be halted and reviewed by Parliament, questioning the valuation, the bidding process and the impact on employees, customers and development lending. It has announced a nationwide two-day hunger strike on November 2–3 and warned of an indefinite strike if its demands are ignored.
Banking and insurance unions, including the United Forum of Bank Unions, the All India Bank Employees’ Association and the All-India Insurance Employees’ Association, have protested against foreign control of IDBI. They argue the bank has returned to profitability and should remain under public ownership, and they are seeking guarantees on job security, pensions, wage revisions and reservations.
AITUC opposes deal
The All India Trade Union Congress (AITUC) opposing the deal has in a media statement by its General Secretary Amarjeet Kaur says,”Selling a profit making bank to attract foreign direct investment is not a far sighted economic strategy. FDI should be encouraged in manufacturing to create new productive capacity, generate employment, facilitate technological development and strengthen the domestic economy. Mere transfer of ownership of national asset to a foreign entity is not a substitute for productive investment. The sale is a betrayal of the public interest.”
“The transfer of management control to private foreign capital gives rise to serious concerns about employment security, labour rights, branch operations, financial inclusion and access to affordable credit for small businesses, agriculture and ordinary customers. In the event of the sale going through, there should be clear and enforceable guarantees to protect wages and working conditions of all employees, regular, contract and outsourced, their trade union rights, Industrial Relations and collective bargaining mechanism, etc., Pensioners should get their interests guaranteed too. Government should also guarantee protection to customers, their deposits and the bank’s obligations to the wider public.”
“The government must halt the sale and transfer of management control. The entire transaction should be placed before Parliament and the public for a transparent assessment of its economic, social and financial consequences. At a time when the economy of the country is in a flux and unemployment is sharply increasing, the union government should change its policy of disinvestment and privatisation. Short-term gains from the monetisation of IDBI is not a substitute to long-term sustained stream of income and dividends essential for the future growth and development.”
Opposition politicians have added a political dimension. Samajwadi Party chief Akhilesh Yadav called the sale a “Season End Sale” of public assets, while Maharashtra Congress leaders demanded a halt, alleging risks to LIC policyholders, national security and the government’s earlier commitment to retain majority ownership.
What the government approved
On October 14, India’s Cabinet Committee on Economic Affairs approved the sale of a 60.72% controlling stake in IDBI Bank to M/s 10955230 Canada Inc., a wholly owned Fairfax subsidiary. The stake is being sold jointly by the Government of India, which holds 30.48%, and Life Insurance Corporation of India, which holds 30.24%.
Fairfax will pay ₹81 per share, or about ₹52,878.08 crore (US$5.6 billion), for control of the bank. The government says the offer exceeded its benchmark valuation of ₹75.99 per share, while Fairfax has said it represents a 23% premium to IDBI’s June 30 book value.
What happens next
The government and LIC will retain a combined 34% stake—15% for the Centre and 19% for LIC—making this a transfer of management control rather than a complete exit from the bank. A share purchase agreement is expected before the end of 2026, with completion targeted during the current financial year.
Fairfax plans to contribute its stakes in Digit Insurance and IIFL Capital to IDBI Bank, potentially turning the lender into a broader private financial-services group. But critics warn this could deepen Fairfax’s influence and dilute minority shareholders, while regulators will need to assess the proposal carefully.
Government’s defence
The Centre rejects the “sell-off” framing, describing the transaction as a strategic restructuring that will make IDBI self-reliant and better able to compete in deposits and credit. It says Fairfax must eventually reduce its holding to 26% under Reserve Bank of India promoter norms, while IDBI’s name and logo will be retained for at least three years.
Officials also say employees and pensioners have “nothing to fear,” and cite a 2018 Delhi High Court judgment to counter claims that the government cannot reduce its stake below 51%.
