IDBI Bank: notes for bank exams

At a glance

IDBI Bank began in 1964 as the Industrial Development Bank of India, a development finance institution (DFI) that funded industry. It became a commercial bank in 2004. After LIC took a majority stake in 2019, the RBI classed it as a private sector bank. In October 2026 the Centre approved selling a controlling 60.72% stake to a Fairfax Financial unit.

Key facts

Set up: 1 July 1964, under the Industrial Development Bank of India Act, 1964, as a DFI
Became a bank: the 1964 Act was repealed in 2003, and Industrial Development Bank of India Ltd took over operations on 1 October 2004
Present name: IDBI Bank Ltd, from May 2008
Under PCA: 5 May 2017 to March 2021
LIC majority: LIC's 51% stake took effect on 21 January 2019
Classification: private sector bank for regulatory purposes, from 21 January 2019 (RBI announced this on 14 March 2019)
Stake being sold: 60.72%, made up of 30.48% from the Government and 30.24% from LIC
Buyer: 10955230 Canada Inc., a subsidiary of Fairfax Financial Holdings
Price: ₹81 a share, or ₹52,878.08 crore in all
Stakes kept after the sale: Government 15%, LIC 19%
Expected completion: by the end of FY27, subject to RBI approval

How it works

From DFI to bank. Like ICICI, IDBI was set up to give long-term loans to industry. Once the DFI model faded, it turned itself into a universal bank. In 2005 its banking subsidiary, IDBI Bank Ltd, was merged back into the parent.

Why it counts as "private". A bank's sector depends on who owns it directly. LIC is fully government-owned, but the Centre's direct stake fell below 51%, so the RBI classed IDBI as a private sector bank. It is therefore not counted among the public sector banks.

The strategic sale, step by step:

Step	Date
CCEA in-principle approval for the sale and transfer of management control	5 May 2021
DIPAM invites expressions of interest	7 Oct 2022
CCEA approves Fairfax unit as buyer	14 Oct 2026
RBI fit-and-proper approval, then share purchase agreement, then open offer to minority shareholders	Pending (target: end-FY27)

Timeline

1964: IDBI set up as a DFI
2004: becomes a banking company
2017: placed under PCA
2019: LIC takes 51%, and the bank is reclassified as a private sector bank
2021: comes out of PCA, and the CCEA clears the strategic sale in principle
2022: expressions of interest invited
2026: Fairfax unit approved as buyer

Recent developments

16 Oct 2026: DIPAM said it expects the sale to close by the end of FY27, subject to RBI approval. The buyer must submit its credentials to the RBI. The share purchase agreement will be signed only after RBI clearance, and an open offer to minority shareholders will follow.
14 Oct 2026: The CCEA approved 10955230 Canada Inc. (Fairfax Financial) as the buyer of 60.72% of IDBI Bank at ₹81 a share (₹52,878.08 crore). The Government will keep 15% and LIC 19%.

Exam traps

IDBI is a private sector bank (since 2019), not a public sector bank, even though the Government and LIC own most of it.
The 60.72% being sold comes from both the Government (30.48%) and LIC (30.24%), not the Government alone.
PCA covered 2017–2021. Don't confuse that with the 2019 change of owner.
DIPAM runs the sale. It is a department of the Ministry of Finance, not of the RBI.
IDBI was a DFI like ICICI. It should not be confused with SIDBI (small industries) or NABARD.

Quick check

Q: In which year was IDBI set up? A: 1964.
Q: What stake in IDBI Bank is being sold to Fairfax? A: 60.72%, at ₹81 a share.
Q: When was IDBI reclassified as a private sector bank? A: January 2019, after LIC took 51%.

Sources

In the news

Every time this topic has appeared in our current affairs, newest first:

Week of 15–21 October 2026IDBI Bank sale: DIPAM targets completion by end-FY27, subject to RBI nod
Week of 8–14 October 2026CCEA approves sale of 60.72% of IDBI Bank to Fairfax for ₹52,878 crore