The ownership of IDBI Bank is once again set to change. After beginning as a private-sector institution, coming under government and LIC control, and later receiving private-sector bank classification, IDBI is now preparing for another major transition. The government and Life Insurance Corporation of India (LIC) have approved Fairfax Financial Holdings as the strategic buyer for a majority stake in the bank.

The development has raised several questions among customers. Will savings accounts and fixed deposits remain safe? Could banking charges or services change? And will LIC policyholders face any impact because the insurance company is selling part of its investment in the bank?

The most important point to understand is that this transaction concerns ownership of IDBI Bank. It does not mean that customers' deposits or LIC insurance policies are being sold or transferred.

Who Will Own IDBI Bank After the Deal?

On October 14, 2026, the Cabinet Committee on Economic Affairs (CCEA) approved the sale of a combined 60.72% stake in IDBI Bank to a subsidiary of Fairfax Financial Holdings. The proposed transaction is valued at approximately ₹52,878 crore.

The proposed shareholding arrangement is as follows:

• Central government: Will sell its 30.48% stake.

• LIC: Will sell its 30.24% stake.

• Fairfax Financial Holdings: Will acquire a combined 60.72% stake.

• Government: Will retain a 15% stake.

• LIC: Will continue holding a 19% stake.

The transaction will reduce the government's and LIC's control over the bank, although neither will completely exit its shareholding. Both are also expected to withdraw their nominees from the bank's board and continue as ordinary shareholders.

However, the deal must still satisfy the applicable regulatory requirements, including the Reserve Bank of India's fit-and-proper assessment, before completion.

IDBI Bank's Journey: From 1964 to Another Ownership Change

IDBI's history dates back to July 1, 1964, when it was established as a Development Financial Institution. Its primary objective was to provide financial assistance to industries and support industrial development in India.

On October 1, 2004, IDBI was converted into a banking company. It subsequently began offering regular banking services, including savings accounts, current accounts, loans and fixed deposits.

Over the years, the bank faced financial difficulties, prompting capital support from the government and LIC. In January 2019, LIC acquired a 51% stake in IDBI Bank. Following the change in its ownership structure, the RBI classified it as a private-sector bank for regulatory purposes.

Now, the proposed transfer of majority control to Fairfax in 2026 marks another significant chapter in the bank's history.

Will Your Savings Account and Fixed Deposits Be Affected?

For existing customers, the biggest concern is whether their money will remain safe after the ownership change.

A change in shareholders does not automatically close bank accounts, cancel fixed deposits or alter the amount deposited by customers. Existing banking relationships and contractual obligations continue unless the bank announces changes in accordance with applicable rules.

Therefore, customers do not need to withdraw their savings or prematurely break fixed deposits simply because the bank is moving towards private ownership.

However, the new management could introduce changes to the bank's future business strategy. These may include improvements in digital banking, changes in branch operations, revised customer-service processes or adjustments to interest rates and banking charges.

Any such changes would depend on the bank's decisions and regulatory requirements. Customers should not assume that their existing FD rates or account charges will change immediately because of the proposed transaction.

Is Your Bank Deposit Completely Safe?

Bank deposits in India are protected under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme, subject to its prescribed conditions.

DICGC provides insurance cover of up to ₹5 lakh per depositor per bank, including both principal and interest on eligible deposits. The coverage applies to savings accounts, current accounts, fixed deposits and recurring deposits.

An important point is that the ₹5 lakh limit is calculated by combining eligible deposits held by the same person in the same capacity at all branches of a bank. Maintaining accounts at multiple branches does not increase the insurance limit.

This deposit insurance protection is not automatically affected by a change in the bank's ownership. However, customers should remember that deposits above the prescribed ₹5 lakh limit are not covered by DICGC insurance.

Will LIC Policyholders Face Any Loss?

LIC is also selling a portion of its investment in IDBI Bank, which has led to questions about whether insurance policies and policyholders' money are involved in the transaction.

The answer is no. LIC's investment in IDBI Bank is separate from the insurance policies it has issued to customers.

LIC is selling its 30.24% shareholding in the bank. This is an investment-related transaction, and the proceeds from the sale will go to LIC. It does not involve transferring or selling customers' insurance contracts.

Consequently, the proposed transaction alone will not cancel an LIC policy, terminate its insurance coverage or automatically change its premium, maturity or claim-related conditions. Policyholders' rights will continue to be governed by the terms of their respective policies.

LIC is also expected to retain a 19% stake in IDBI Bank after the transaction, meaning it will remain a shareholder rather than completely exiting the bank.

Why Does the Government Want to Sell Its Stake?

IDBI Bank faced significant financial challenges in the past. In May 2017, the RBI placed the bank under the Prompt Corrective Action (PCA) framework, which imposed restrictions aimed at improving its financial position.

Following improvements in the bank's performance, the RBI lifted these restrictions in March 2021.

The government believes that bringing in a private strategic investor could help IDBI Bank strengthen its operations, access new capital, adopt better technology and improve management efficiency.

A new majority owner could also help the bank expand its lending and deposit businesses and compete more effectively in the banking sector. However, whether these expected benefits materialise will depend on the bank's future performance and the decisions taken by its new management.

What Will Change and What Will Remain the Same?

What Should IDBI Bank Customers Do Now?

Existing IDBI Bank customers do not need to panic or take immediate action merely because of the proposed ownership change. There is no need to close accounts or withdraw deposits in haste.

Customers should continue monitoring official bank announcements for information about any future changes involving branches, IFSC codes, digital banking facilities or service procedures.

LIC policyholders should continue paying premiums on time and maintain their policy documents, maturity details and claim-related records as usual.

The proposed transaction is primarily a change in who controls IDBI Bank. For customers, the important thing is to distinguish between a change in the bank's ownership and a change in their existing banking or insurance contracts.