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Govt Eyes March 2026 Deadline for IDBI Bank Sale But Bankers Oppose
Govt plans IDBI Bank sale by March 2026, but unions oppose citing risks to loans, social schemes, and depositor safety.
Author: Kanal English Desk
Published: 2 hours ago
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The Indian government is confident that the sale of its majority stake in IDBI Bank will be completed within the current financial year, 2025-26. This assurance was given by M. Nagaraju, Secretary of the Department of Financial Services (DFS), while speaking at the Global Fintech Festival (GFF) on Tuesday; Business Line reported.
Nagaraju said the IDBI Bank disinvestment process is progressing as planned and will be concluded before the fiscal year ends in March 2026. The government is planning to sell a 60 per cent stake in the Mumbai-headquartered bank. At present, the government holds more than 45 per cent, while the Life Insurance Corporation of India (LIC) owns just over 49 per cent.
Concerns Raised by Unions
However, IDBI officers’ and employees’ unions have voiced serious concerns about privatisation. They warn that:
- Subsidised loans for farmers and small businesses could be curtailed.
- Unsecured education loans for poor students may be discontinued.
- Participation in key social security schemes such as PMJDY, PMSBY, PMJJBY, and APY may decline.
- Depositor safety could be at risk beyond the insured limit of ₹5 lakh in case of a bank moratorium.
Union leaders cited the collapse or near-collapse of private banks like Punjab & Maharashtra Co-operative Bank, Lakshmi Vilas Bank, and YES Bank as reminders of depositors’ vulnerability under private ownership.
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Broader Context
Banking unions have long opposed the government’s disinvestment plan. Since IDBI Bank was reclassified as a private sector bank in 2019, they argue, its public mandate has already
weakened — with reductions in priority lending schemes such as Kisan Credit Card (KCC) loans and unsecured education loans. Unions fear that a complete exit by the government would shift the bank’s focus permanently from public service to profit-making.
Read more here On Bankers’ Opposition to Privatisation
Outlook
While the government is determined to finalise the sale within FY26, the pushback from unions highlights the growing tension between reforms aimed at efficiency and profitability and the social obligations of public sector banks. How these concerns are addressed may shape both the sale process and the future of IDBI Bank’s role in India’s financial system.
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