Fairfax may get up to two years to restructure holdings in IDBI Bank deal

Canada-based Fairfax Financial, considered a leading contender for the government’s stake in IDBI Bank, may be given up to two years to align its existing banking interests with regulatory requirements, according to a report by Business Standard. The proposed transaction involves the sale of a majority stake held by the government and Life Insurance Corporation of India (LIC). Valued at more than $5 billion, the deal could become the largest foreign investment in an Indian bank.Fairfax faces RBI ownership rulesA key issue is Fairfax’s existing holding in CSB Bank, where it owns around 40%. RBI regulations prevent an entity from independently owning and operating two separate banks, creating a need for Fairfax to restructure its interests if it acquires IDBI Bank.IDBI Bank Q1 FY27 Profit Rises To ₹2,130.57 Crore One option under consideration is merging CSB Bank with IDBI Bank. Another possibility is for Fairfax to sell its entire holding in CSB. Sources said Fairfax’s Indian arm is examining the sale option, partly because a merger could create complications, including labour-related issues.However, a government official cautioned that reports of a two-year consolidation period for Fairfax remain speculative.IDBI Bank deal enters final stageThe government has already received revised bids from Fairfax and Emirates after lowering the reserve price for the IDBI Bank transaction. The proposal has cleared a committee of senior bureaucrats and is now awaiting consideration by a ministerial panel. Any final transaction would also require regulatory approvals from the RBI and SEBI.CSB Bank, headquartered in Kerala, had business worth around ₹86,282 crore, while IDBI Bank has assets of nearly $42 billion. Fairfax took control of CSB in 2018 when the lender needed fresh capital.Fairfax India Holdings Corporation, the Canadian investor’s India-focused investment vehicle, had assets of about $3.8 billion as of June 2026.

The Canadian investor is likely to ‌be given up to two years to either sell its stake in CSB Bank or merge it with IDBI Bank, sources said