Canada’s Fairfax Financial, a frontrunner for acquiring the government and LIC’s stake in IDBI Bank, may be given up to two years to consolidate its existing banking interests in India, according to sources. The proposed transaction, valued at more than $5 billion, would be the largest foreign investment in an Indian bank and is currently in the final stages of approval. Under Reserve Bank of India rules, an entity cannot own and operate two separate banks. Fairfax owns around 40% of CSB Bank, creating a regulatory requirement if it acquires control of IDBI Bank. Sources said Fairfax could either sell its stake in CSB Bank or merge the lender with IDBI Bank within the proposed two-year period. A government official, however, cautioned that the reported timeline remains speculative. Revised bids from Fairfax and Emirates were received last month after the government lowered the reserve price. The transaction has reportedly cleared a panel of senior bureaucrats and is now before a ministerial committee, followed by regulatory approvals from the RBI and SEBI. Fairfax is also exploring the possibility of selling its entire stake in CSB Bank. The Kerala-based lender has a business size of around ₹86,282 crore and came under Fairfax’s control in 2018 after requiring fresh capital.
