The Indian government and Life Insurance Corporation of India (LIC) are set to sell a combined 60.7% stake in IDBI Bank. The government owns 45.48%, and LIC holds 49.24%. This sale is part of a larger privatization plan. The government expects to announce the winning bidder by March 2026. Kotak Mahindra Bank has clarified that it has not made any financial bid for IDBI Bank, dismissing media reports suggesting otherwise. Meanwhile, sources told Reuters that Fairfax, which holds a majority stake in CSB Bank, might merge IDBI Bank with CSB Bank if it wins the bid. IDBI Bank’s current market capitalization is around Rs 1.12 lakh crore. The government aims to complete the sale before March 31, 2026. The winning bidder will have the right to rename the bank. IDBI Bank started in 1964 as the Industrial Development Bank of India to support industrial finance. In 2005, it became a universal bank merging its development finance and commercial banking operations. However, this dual role caused problems. The bank focused heavily on corporate lending and lagged in retail banking growth. By the mid-2010s, rising bad loans and weak capital hurt its finances. The Reserve Bank of India placed IDBI under Prompt Corrective Action in 2017 due to capital and asset quality issues. This limited its lending and showed the bank’s struggles. In 2019, LIC took control by buying a 51% stake and injecting capital, which strengthened the bank. The RBI reclassified IDBI as a private bank, despite majority government ownership. IDBI Bank shares have gained 31.23% in the past year. (Disclaimer: Views in this article are those of experts and do not represent The Economic Times.)