IDBI Bank privatisation: From RBI curbs to Fairfax's ₹52,878 crore deal, a timeline

After years of financial restructuring, regulatory clearances and a prolonged bidding process, IDBI Bank's privatisation has reached a key milestone. The Cabinet Committee on Economic Affairs (CCEA) on Wednesday, October 14, approved Fairfax Financial Holdings as the strategic buyer for a 60.72% stake in the lender for ₹52,878.08 crore.

The deal traces its roots to the bank's financial recovery and the government's decision to pursue strategic disinvestment in 2021. Here is a timeline of the key developments that shaped the proposed sale.

1. March 2021 — IDBI Bank exits RBI's PCA framework

The Reserve Bank of India (RBI) removed IDBI Bank from its Prompt Corrective Action (PCA) framework following improvements in its financial and operational performance.

The framework imposes restrictions on banks facing financial weaknesses, including limits relating to lending and expansion. The exit marked an improvement in IDBI Bank's regulatory position as it worked to strengthen its balance sheet, ahead of the government's formal move towards strategic disinvestment.

2. May 2021 — Cabinet clears strategic sale of IDBI Bank

The CCEA, chaired by Prime Minister Narendra Modi, gave in-principle approval for the strategic disinvestment of IDBI Bank and the transfer of management control to a strategic buyer.

At the time, the government held 45.48% of the bank, while the Life Insurance Corporation of India (LIC) held 49.24%. The government said a strategic buyer could bring in fresh capital, technology and management expertise to strengthen the lender.

The exact stakes to be sold were to be determined as the transaction was structured.

3. October 2022 — Government launches 60.72% stake sale

The Department of Investment and Public Asset Management (DIPAM) issued a preliminary information memorandum on October 7, 2022, inviting expressions of interest (EOIs) for the sale of a combined 60.72% stake in IDBI Bank.

The proposed sale covered 30.48% held by the government and 30.24% held by LIC, along with the transfer of management control. This marked the formal start of the disinvestment process. The government subsequently revised the bidding schedule and other details through corrigenda.

4. January 2023 — Fairfax and Emirates NBD emerge as interested bidders

Fairfax Financial Holdings, led by Prem Watsa, and Dubai-based Emirates NBD were among the prospective buyers reported to have submitted expressions of interest.

The EOI stage allowed the government to assess potential bidders before proceeding to regulatory screening and due diligence. The sale was structured as a strategic disinvestment, with management control intended to pass to the successful buyer.

5. August 2024 — RBI clears potential buyers

The RBI reportedly granted fit-and-proper clearance to Fairfax Financial, Emirates NBD and Kotak Mahindra Bank, allowing them to progress in the acquisition process.

Such assessments are important because prospective buyers of banks must meet regulatory standards before taking control. At the time, Kotak Mahindra Bank's continued interest was reported to be uncertain, while Fairfax and Emirates NBD remained prominent contenders.

The clearances did not amount to final approval for the acquisition.

6. August 2025 — Shortlisted bidders begin due diligence

Following security clearance from the Ministry of Home Affairs and the RBI's fit-and-proper assessment, qualified bidders were permitted to begin due diligence on IDBI Bank.

Prospective buyers could examine the lender's financial position, operations and other relevant information, access its data room and review transaction documents, including the draft share purchase agreement.

The exercise was intended to help bidders assess the risks and terms of the proposed acquisition before submitting financial offers.

7. February 2026 — Government receives financial bids

On February 6, 2026, the government received financial bids from Fairfax India Holdings, Emirates NBD and Kotak Mahindra Bank for the proposed 60.72% stake sale.

The bidders had completed due diligence and cleared the technical stage, allowing them to submit price offers. The bids were to be assessed against the government's reserve price and other transaction requirements before a preferred buyer could be selected.

8. March 2026 — Bids fall short of reserve price

The financial bids submitted in February reportedly failed to meet the government's reserve price, delaying the transaction.

The government had to consider whether to revise the terms or price expectations rather than proceed with offers it considered insufficient. The setback came despite the completion of earlier screening and due-diligence stages, prompting the sale process to return to the bidding stage.

9. July 2026 — Fairfax and Emirates NBD submit revised bids

After the initial bids fell short of the reserve price, the government invited revised financial offers from prospective buyers.

Fairfax Financial and Emirates NBD were reported to have submitted revised bids on July 13, 2026. The government then evaluated the offers as it sought to complete the long-delayed transaction.

10. October 14, 2026 — Cabinet approves Fairfax-backed buyer for ₹52,878 crore

The CCEA approved Fairfax Financial Holdings as the strategic buyer for a 60.72% stake in IDBI Bank for ₹52,878.08 crore, equivalent to ₹81 per share.

The proposed sale combines the government's 30.48% stake and LIC's 30.24% holding, transferring management control to the buyer.

Following the transaction, the government is expected to retain a 15% stake and LIC 19%, leaving their combined holding at 34%.

The Cabinet's approval marks a major milestone in the privatisation process. The transaction will still require the applicable regulatory clearances before it can be completed.