Business · India Bureau
Cabinet approves sale of IDBI Bank to Canadian firm
India's cabinet has given the green light to the long-pending privatisation of IDBI Bank, with a Canadian company set to acquire the government and LIC's stake in the lender.
LSN India ·
The Union Cabinet has approved the divestment of IDBI Bank, clearing the way for a Canadian entity to take over the state-owned lender, according to government sources. The approval marks a significant milestone in India's ongoing efforts to reduce its stake in key financial institutions.
Both the Government of India and Life Insurance Corporation (LIC) hold substantial shareholdings in IDBI Bank. The proposed transaction will involve the transfer of their combined stake to the Canadian buyer, effectively shifting control of the bank from public to private hands.
The divestment had been pending for an extended period before receiving cabinet approval. IDBI Bank, which has faced profitability challenges in recent years, is expected to benefit from fresh capital and management expertise under private ownership.
The sale represents part of the government's broader privatisation agenda aimed at improving operational efficiency and reducing fiscal burden. The transaction details, including valuation and implementation timeline, are expected to be finalised in subsequent stages of the process.
The move aligns with India's strategic initiative to modernise its banking sector and attract foreign direct investment in key financial institutions.