The story of IDBI Bank is once again taking a new turn. Once it was a private sector bank, then it came under government control and now, almost two decades later, its command is set to return to private hands. The government and Life Insurance Corporation of India (LIC) have approved Fairfax Financial Holdings as a strategic buyer to sell its stake in the bank.

After this news, a question naturally arises in the minds of IDBI Bank customers and LIC policyholders – will the money deposited in the bank be safe? Will the rules for accounts, FDs and banking services change? And will LIC’s policy or even its money be affected by this deal?

First of all, it is important to understand that selling IDBI Bank stake does not mean that customer deposits or LIC policies are being sold. This is a change in ownership of the bank, and does not automatically change existing contracts with customers.

Who will own IDBI Bank?

On October 14, 2026, the Cabinet Committee on Economic Affairs (CCEA) approved the sale of 60.72% stake in IDBI Bank to a subsidiary of Fairfax Financial Holdings. The deal is worth around Rs 52,878 crore.

Distribution of shares is as follows.

That means the government and LIC will not be completely out of the bank, but control of both will be lost. They will also withdraw their nominees from the bank’s board and become common shareholders. However, the buyer has to satisfy RBI’s due and fit test and other regulatory conditions before the deal is completed.

The IDBI story: The journey began in 1964

To understand the history of IDBI we have to go back a bit. It was established on 1 July 1964 as a development financial institution. At that time his job was to provide financial support to industries. On October 1, 2004, it transformed into a banking company. After this, it started offering savings accounts, current accounts, loans and other banking services like normal banks. The government and LIC invested capital in the bank after its financial condition weakened. In January 2019, LIC acquired 51% stake in IDBI Bank. After this RBI declared it a private sector bank in terms of regulatory classification. Now with approval to hand over control to Fairfax in 2026, another major change in bank ownership is about to take place.

What will be the impact on your savings account and FD?

For those who have a savings account, current account or fixed deposit with IDBI Bank, the most important question is whether the money will be safe? Your bank account does not close simply by changing owners and the amount deposited does not change automatically. The Bank’s business and its existing contracts with customers continue. Hence, customers do not need to withdraw their money or break their FD due to this deal. However, after the arrival of the new owner, the bank’s business strategy, digital services, branches, interest rates and customer services may change in the future. But these changes will depend on the bank’s business decisions and applicable regulations. It is not right now to say that interest rates or banking charges for customers will change immediately.

Are bank deposits 100% safe?

In India, DICGC i.e. Deposit Insurance and Credit Guarantee Corporation provides insurance protection on deposits in banks. Under this, a maximum of Rs. Insurance cover up to 5 lakhs is available. It includes principal amount of savings account, current account, FD and RD with interest. Keep in mind, this limit of Rs 5 lakh is applicable by adding up the amount deposited across all branches of the same bank. Opening accounts in different branches does not change the insurance cover. This protection does not terminate due to a change in ownership of IDBI. However, it is also important to understand that DICGC Rs. Does not cover amount exceeding 5 lakhs.

What will be the impact on LIC policyholders?

LIC is also selling its stake in this deal, so a question may arise in the mind of the policyholders whether their insurance policy or deposited premium money is also involved in this deal? Answer is – No, selling LIC’s stake in IDBI Bank does not mean selling LIC’s policy. LIC is an investor in the bank as a shareholder. It is selling its 30.24% stake in IDBI Bank. LIC will get the amount received in return. The transaction relates to LIC’s stake in the bank and not to the transfer of the insurance contract to the policyholders. So, just because of this deal, your LIC policy will not get cancelled, its insurance cover will not end and the terms and conditions of the policy will not change automatically. Payment of premium, maturity and claim rights will be as per your policy terms. LIC will still hold 19% stake in IDBI Bank after the deal. That means LIC is not going out of the bank completely.

Why is the government selling IDBI Bank?

At one time the financial condition of IDBI Bank was very weak. In May 2017, the RBI placed it under the Prompt Corrective Action (PCA) framework. During this period, many restrictions were imposed on the bank. Later the bank’s financial condition improved and in March 2021 RBI lifted PCA restrictions. The government argues that the entry of a private strategic investor can benefit the bank with new capital, technology and better management. According to the government, this can help the bank grow its business in the future and compete in the loan and deposit sector. However, the actual impact of these potential benefits will only be known from the bank’s performance in the future.

What can and cannot be changed?

What should consumers do now?

IDBI Bank customers need not panic now. There is no need to hastily close accounts or break FDs just after hearing the news of privatisation. Customers should keep an eye on the bank’s official information. If there is any change in IFSC code, branches, digital banking or any service process in future, official information will be given by the bank. LIC policyholders should also keep documents related to their policy premium, maturity and claims.