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The People's Commission on Public Sector and Public Services has demanded that the Centre immediately stop the sale of IDBI Bank to Fairfax, a Canadian company. In a detailed statement titled "Stop selling the golden goose to foreigners – Stop IDBI sale to Fairfax", the Commission said the deal is opaque, legally questionable and against the Constitution's Directive Principles.
Thomas Franco, former General Secretary of the All India Bank Officers' Confederation, has also opposed the deal in his column "Random Reflections" for the Centre for Financial Accountability. He says the sale can still be stopped if public pressure is mounted, as has happened with earlier such proposals.
The Cabinet Committee on Economic Affairs (CCEA) has approved the strategic sale of up to 30.48% of the Centre's stake and up to 30.24% of LIC's stake in IDBI Bank to Fairfax. The total is 60.72% of the bank's equity, for Rs 52,878 crore. After the sale, the Centre will hold 15% and LIC 19%. The Commission says this will make both minority shareholders with little say in IDBI's future. The deal now has to be processed by the RBI.
The People's Commission's Case
The Commission says that under Article 12 of the Constitution, public sector undertakings and public banks are instruments of the State for fulfilling its welfare role and the Directive Principles. Private banks, it says, work mainly to maximise profit and cannot be expected to follow these principles.
The Commission points out that after the government decided to privatise IDBI in May 2021, it delayed the sale for five years. During this time IDBI improved its performance and earned profits of Rs 48,151 crore, which is already 91% of the sale proceeds now being realised. It asks why a profit-making public sector bank is being privatised.
On valuation, the Commission says the names of the agencies that valued IDBI, their methods and their inputs have not been disclosed to Parliament or the public. Apart from the preliminary information memorandum issued on October 7, 2022, it says there has been no transparency in the process. The bidding rules excluded other public sector undertakings, so a bank like SBI could not bid, and the contest was restricted to two foreign entities, one from the UAE and one from Canada. The Commission says this suggests the government would rather hand IDBI to a foreign agency than to its own public banks.
The initial reserve price was Rs 94.42 per share. When the two bids fell short, the Commission says, the government did not widen the bidding. Instead it used other valuation methods in a "contrived and non-transparent manner" to lower the reserve price to Rs 75.99, which is 19.5% less. The Canadian bidder then offered Rs 81 per share, and the sale was finalised. The Commission also says IDBI holds more than 50 acres in Hyderabad, where a recent Telangana government auction showed a market value of Rs 269 crore per acre. That puts the land alone at Rs 13,450 crore, and it says the total value of IDBI's lands would be far above the bid value of Rs 52,878 crore.
The Commission says IDBI is a partner in many flagship welfare schemes. It hosts more than 18.72 lakh Jan Dhan accounts, 10.86 lakh Suraksha Bima Yojana account holders, 3.81 lakh Jeevan Bima Yojana account holders and 5.48 lakh Atal Pension Yojana account holders. It also runs 191 Aadhaar enrolment centres and a rural self-employment training institute in Satara. The Commission fears that under foreign control the bank may stop small loans such as MUDRA, PM SVANidhi, Stand Up India and education loans. It says metro and urban branches have already stopped farm loan interest subvention since 2019, after the RBI reclassified IDBI as a private sector bank, and rural branches may follow.
Legal And Parliamentary Concerns
The Commission says many IDBI land parcels were acquired under old land acquisition laws that prohibit transfer to private agencies. It also says the terms of sale violate Section 5(1) of the IDBI (Transfer of Undertaking and Repeal) Act, 2003, which implicitly assures that employees' service conditions will not be altered.
It further says the sale breaches an assurance given to Parliament. A Parliamentary Standing Committee on Finance recommended in June 2003 that the government's holding should never fall below 51%. The then Finance Minister assured the Lok Sabha on December 8, 2003, and the Rajya Sabha on December 15, 2003, that the government would "at all times maintain not less than 51% equity holding in IDBI as a Banking Company".
The Commission also flags a conflict of interest. Fairfax already holds 40% of Catholic Syrian Bank, which it bought in 2018, and the Commission says the RBI does not, as a matter of policy, allow the same promoter to control two banks. It adds that Fairfax's stakes in IIFL Capital Services, IIFL Finance and 5paisa Capital could create further conflicts. Franco notes that the RBI has relaxed its guidelines to give Fairfax two years to merge CSB with IDBI or sell its CSB stake, which he calls favouritism.
The Commission says LIC's stake in IDBI was funded by 262 million policyholders, who were not taken into confidence. IDBI's retail depositors were not consulted either. Deposits stood at Rs 3,47,163 crore against total business of Rs 6,00,789 crore as of March 31, 2026. IDBI has 19,108 employees, including 9,500 from SC/ST/OBC categories, 6,911 women and 884 differently abled staff. The Commission says the terms of sale offer them no safeguards and that reservation in jobs will end once IDBI becomes a private entity. It also warns of wage settlement problems, noting that Catholic Syrian Bank has not implemented industry-level wage revision. Recalling that the government had to abort the disinvestment of Central Electronics Ltd and Pawan Hans after public uproar, the Commission says privatisation of a public financial institution is itself a concern, and that "foreignisation" is far more serious and calls for a debate in Parliament.
Selling A Profitable Bank Makes No Sense
Franco says the Centre took the decision when the whole country is agitating against SIR and demanding electoral integrity, and when the United Forum of Bank Unions is negotiating a five-day week with the High Power Committee.
He traces IDBI's history. It was set up in 1964 as a wholly owned subsidiary of the RBI and moved to the Government of India in 1976. It became the principal development finance institution and helped set up SIDBI, Exim Bank, NSE, NSDL and SHCIL. According to Franco, the "error" was made in 2004, when the NDA government turned IDBI into a commercial bank. The RBI later declared it a private bank, even though the Government and LIC hold 94.71% of its shares. He says this was done to allow foreign ownership, since private banks can have up to 74% foreign investment.
Franco says mismanagement pushed IDBI into losses of Rs 45,064 crore between 2016 and 2020. LIC then bought 51% in 2018 for Rs 21,624 crore and infused Rs 4,743 crore in 2019, while the Government contributed Rs 4,557 crore. After LIC took over management, he says, profits rose from Rs 1,359 crore in 2021 to Rs 9,513 crore in 2025-26. "Selling a profitable bank that LIC is expertly managing makes absolutely no sense, especially when the financial conditions are favourable right now," he says. He adds that LIC gets 59% of its bancassurance business through IDBI and will lose it, and that LIC's share price has already fallen to Rs 382 from its IPO price of Rs 949.
On Fairfax, Franco cites a $6 billion lawsuit filed in 2006, an insider trading probe by Quebec's securities regulator in 2014, a Rs 50 lakh fine on its auditors by the NFRA in 2024, and allegations by short-seller Muddy Waters in 2024. He also cites a 2021 allegation by the Central Board of Direct Taxes against Quess Group, in which Fairfax is the major promoter, of concealing Rs 880 crore. He points to Fairfax's wide Indian holdings, including 64% of Bangalore International Airport, 49% of Go Digit General Insurance, 88% of National Collateral Management Services and stakes in IIFL, 360 ONE and 5paisa. Fairfax is also the primary promoter of Quess Corp, Thomas Cook (India) and Sterling Holiday Resorts. He says the price fixed by valuers was reduced to benefit a single buyer, instead of floating fresh tenders in which Indian banks could bid.
"While large industries are prohibited in India from owning or promoting banks, how can a foreign corporate that wields control in various industries own an Indian bank? Are the Government and the RBI blind?" Franco asks.
Franco warns that more banks could follow. He cites foreign holdings of 39.39% in HDFC Bank, 38.05% in Axis Bank, 34.68% in ICICI Bank and 11.83% in SBI. He says the Finance Minister has announced plans to sell three public sector banks, and NITI Aayog has reportedly recommended privatising Central Bank of India and Indian Overseas Bank. He also says US Treasury officials have twice asked India to privatise SBI. He suggests nationalising private banks, as was done in 1969 and 1980.
"It took 200 years to send out the East India Company and its masters. If the politicians and the people of India do not wake up, India will be gone," Franco says.
Demands And Agitation
The Commission has demanded that the government immediately stop the sale of IDBI to a foreign company and uphold the Constitution and the Directive Principles. It wants the LIC Act amended to let LIC enter banking with full control over IDBI, or a public sector bank allowed to buy the shares at a higher price and take over management. It also asks the government to refrain from selling stakes in public sector enterprises and banks to foreign agencies, to amend the IDBI Act and declare IDBI a public sector bank, and to consider converting it into a Development Finance Institution, as originally intended.
IDBI Bank employees have announced a two-day strike on November 2 and 3. The Commission's statement says the United Forum of Bank Unions has opposed the deal, and that associations and unions have announced a two-day hunger strike, with UFBU likely to join or organise other forms of agitation. Franco has appealed to UFBU to announce its own strike against privatisation, and says bank employees across the industry should stand with other trade unions and people's organisations if the sale is not stopped.
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