Columbia University, New York: In a much-awaited move, last week, the Cabinet Committee on Economic Affairs approved the sale of a combined 60.72% stake in IDBI Bank held by GoI and LIC to Canada Inc, a Canadian subsidiary of Fairfax Financial Holdings Ltd. The sale would fetch the government ₹26,544 cr and LIC ₹26,335 cr.
While some formalities remain before the sale is concluded, the decision can be hailed as a landmark step forward in GoI's larger privatisation programme. Even though IDBI was recategorised as a private sector bank by RBI in 2019 after LIC acquired a 51% controlling stake, its sale is an encouraging sign that PSBs can be sold to foreign buyers, countering the oft-repeated argument that there are not enough potential buyers of Indian banks.
