Rahul Gandhi questioned the sale of IDBI Bank to Canada’s Fairfax, while Finance Minister Nirmala Sitharaman said the process followed due process.
Under a sale approved by the Union Cabinet, Fairfax Financial Holdings Ltd, a Canadian financial services company, will acquire a 60.72% stake in IDBI Bank Ltd for ₹52,878.08 crore. Management control will also change hands.
Gandhi’s concerns about employee and depositor protections and the end of public ownership have set the bank’s recovery from high levels of bad loans against the sale. Sitharaman defended the process and credited the government with reviving the lender.
I took that question to the Lok Sabha. I asked why a profitable public bank was being sold and how its employees and depositors would be protected. The government gave no reason. Now it has decided to sell IDBI Bank to Fairfax, a Canadian company,
After meeting IDBI Bank employees in the Parliament complex in March last year, Gandhi said he raised their concerns in the Lok Sabha. The employees asked why the government was selling a bank they had made profitable.
He also said private ownership would end reservation for Scheduled Caste, Scheduled Tribe and Other Backward Class candidates at the bank.
all due process was followed in the IDBI Bank strategic restructuring
Sitharaman said the bank was ready for its next phase of growth. The government is selling 30.48% and LIC 30.24%, for a combined 60.72% stake. The winning bid was ₹81 per share.
IDBI Bank’s bad-loan ratios
September 2018
Gross NPA
31.78%
- Net NPA: 17.30%
March 2026
Gross NPA
2.32%
- Net NPA: 0.15%
Government data show the government put around ₹25,000 crore of capital into IDBI Bank between 2010 and 2020. Sitharaman said the Modi government had revived the lender through professional management, prudent lending and recapitalisation of more than Rs 25,000 crores.
The IDBI Bank was handed over to us in poor shape, as IDBI itself was forced to lend to large business groups with close connections to Congress leaders such as Videocon, Winsome, ABG Shipyard, Kingfisher, etc. These turned into bad loans, causing huge losses for IDBI Bank, which we recognised.
Sitharaman also accused the Congress of pressing bank employees to make loans outside prudent lending norms.
In 2003. The government promised Parliament that it would always hold at least 51 per cent of IDBI Bank. The promise may not bn written in law, but a promotes made to Parliament is a promise made to the people of India,
The government is expected to hold a 15% residual stake after the deal, and LIC 19%. Neither will have a seat on the bank’s board or a contingent liability. LIC must reduce its holding by 4% within two years to retain ownership of LIC Housing Finance.
The Finance Ministry said the government and LIC would retain shares to benefit from future increases in the bank’s value. Two independent advisers assessed the bank using separate methods. Because no suitable comparable transactions were available, the valuation used listed public-sector banks as comparables.
The deal has been described as the largest strategic disinvestment and the largest investment in the country by a foreign financial services company.
At the time of reporting, the BJP, IDBI Bank and Fairfax hadn’t responded to Gandhi’s allegations. Completion of the deal is anticipated by the end of the fiscal year, though no exact date has been set.
