The Indian government is currently evaluating revised financial bids for the strategic disinvestment of IDBI Bank, a process that aims to transfer management control of the lender. Government sources confirmed on September 25, 2026, that the evaluation is progressing steadily as officials review the proposals submitted by interested parties.
Regulatory adjustments under the Securities Contracts Regulation Act exempt state-run firms from minimum public shareholding requirements, granting IDBI Bank an exemption whose exact timeframe will be disclosed to shortlisted bidders via the draft share purchase agreement.
This marks the second time financial bids have been submitted for the stake sale. The proposed transaction involves the government and the Life Insurance Corporation of India (LIC) divesting a combined 60.72% stake in the bank. Currently, the government and LIC hold a total of 94.71% in the lender, with the government owning 45.48% and LIC holding 49.24%. Under the current divestment plan, the government intends to sell 30.48% and LIC 30.24% of their respective holdings.
The two primary entities interested in the acquisition are Fairfax Financial Holdings, backed by billionaire investor Prem Watsa, and the Dubai-based Emirates NBD. Both organizations have established footprints in the Indian banking sector. Emirates NBD acquired a majority stake in RBL Bank earlier this year, while Fairfax Financial maintains a 40% stake in the private-sector lender CSB Bank.
Acquisition of major shareholdings in private sector banks is regulated under the Banking Regulation Act and associated directions, requiring prior approval from the Reserve Bank of India, which is mandated to decide on a stake acquisition request within 90 days.
Both bidders have successfully navigated the necessary regulatory hurdles to remain in the process. According to reports, they have received security clearance from the Ministry of Home Affairs and have been assessed as Fit and Proper by the Reserve Bank of India. This assessment is a critical requirement for any entity seeking to acquire a significant stake in an Indian banking institution.
The strategic sale of IDBI Bank has been a long-standing objective of the government's broader disinvestment program. The initial Expression of Interest for the sale was first floated in October 2022. The current evaluation phase represents a significant step forward in the transaction, which seeks to reduce the state-backed presence in the bank while inviting private management. The government is expected to complete its assessment of the revised bids before determining the next procedural steps in the divestment timeline.
