What Fairfax did to a hundred-year-old Kerala bank, and to the people who worked in it, is the clearest warning India has about the sale of IDBI Bank.
“Government shall at all times maintain not less than 51% equity holding in IDBI as a Banking Company.”
Finance Minister to the Lok Sabha on 8 December 2003
On the afternoon of 14 October 2026, the Union Cabinet signed away an institution older than most of the people who work in it. The Cabinet Committee on Economic Affairs approved the sale of 60.72 per cent of IDBI Bank to 10955230 Canada Inc., a subsidiary of Toronto-based Fairfax Financial Holdings, for Rs. 52,878 crore, or Rs. 81 a share. The government sells 30.48 per cent, LIC sells 30.24 per cent, and the two are left holding about 15 and 19 per cent. The Finance Minister prefers to call it a “strategic restructuring”. Prem Watsa, who heads Fairfax, was plainer: for him it is “a once-in-a-lifetime opportunity”.
Whose opportunity, and at whose cost? To answer that, we must go back to 1964, and then to a quiet town in Kerala.
A bank the nation built
IDBI came into being on 1 July 1964 under an Act of Parliament, as a wholly owned subsidiary of the Reserve Bank, to finance India’s industrialisation when private capital would not. For forty years it was the country’s apex development financial institution; in 1990 it gave birth to SIDBI for small industry. When Parliament repealed the IDBI Act in 2003 to turn it into a bank, the passage was bought with a promise. On 8 December 2003 in the Lok Sabha, and again on 15 December in the Rajya Sabha, Finance Minister Jaswant Singh assured the House that the government would at all times hold not less than 51 per cent. The Standing Committee on Finance had warned that if that holding ever fell below 51 per cent, depositors who had trusted IDBI could panic. The assurance went on the record of the Committee on Government Assurances.
Then came the corporate defaulters. By June 2018 IDBI’s net NPAs had touched 18.8 per cent, and a year later gross NPAs stood near 29 per cent. Who rescued it? The people of India. The government put in Rs. 12,471 crore in 2017-18 alone. LIC, which is to say India’s policyholders, paid Rs. 21,624 crore for 51 per cent in January 2019, and in September 2019 LIC and the government added another Rs. 9,300 crore. Quietly, in March 2019, the RBI reclassified IDBI as a private bank. The bank left the RBI’s Prompt Corrective Action framework in March 2021.
The rescue worked. In 2025-26 IDBI earned a net profit of Rs. 9,513 crore, up from Rs. 7,515 crore the year before. Its deposits stand at Rs. 3.47 lakh crore, its net NPA at 0.15 per cent, its return on assets at 2.27 per cent. The public carried the losses; now that the profits have arrived, they are being handed over, at a price Fairfax itself describes as about 23 per cent above book value.
Thrissur, 2018: the rehearsal in CSB Bank
The Catholic Syrian Bank was founded in Thrissur in 1920, a bank of Kerala’s traders, farmers and Gulf families. By the late 2010s it was bleeding, with losses in four of the five years to 2018-19. In 2018 the RBI allowed Fairfax, through FIH Mauritius, to buy 51 per cent for about Rs. 1,208 crore at Rs. 140 a share, the first time a foreign non-bank investor had been allowed a majority in an Indian bank.
Honesty demands that we say what the accounts show. On paper, CSB recovered. It has reported a profit every year since 2019-20, Rs. 633 crore in 2025-26, and its auditors gave an unmodified opinion on its 2025-26 accounts. The question a trade unionist must ask is not whether the bank made money. It is who paid for it, and what kind of bank it became.
Up to the 10th Bipartite Settlement, CSB stood inside the industry-wide wage agreement like every other bank. After Fairfax arrived, the management simply did not give the IBA its mandate. The 11th Settlement was signed on 11 November 2020 and the 12th on 8 March 2024. As AIBEA recorded on 5 September 2026, CSB’s employees and officers are still paid under the 10th Settlement, which expired in October 2017: two settlements and nearly a decade behind every public sector bank, nine private banks including Federal, South Indian and Kotak, and seven foreign banks. They have struck work thirteen times, once with every bank in Kerala shutting down in solidarity. In 2021 the management’s answer was that productivity was low.
Meanwhile the permanent workforce was replaced. In 2021, some 1,200 of about 3,000 staff were already on cost-to-company contracts. By August 2024, of 7,863 employees only about 1,000 remained on IBA terms; new recruits were designated “officers”, outside collective bargaining, some on Rs. 17,500 a month, even as the Managing Director’s pay was revised from Rs. 2.3 crore to Rs. 2.42 crore a year. The staff federation’s strike notice of February 2026 lists the rest: HRA arrears withheld, leave refused for want of staff, joint-custody norms diluted, charge-sheets issued without enquiry, executives paid crores in ex-gratia, and no structured meeting with unions for years. In its stock exchange filings the management observes that less than 30 per cent of its workforce belongs to any union. That sentence is the whole strategy.
What kind of bank CSB became..?
The community bank became a gold-loan counter. Gold loans rose from 29 per cent of the book in 2019-20 to over half, 53 per cent in 2025-26. Cheap savings and current-account deposits fell from 33.7 per cent of deposits in March 2022 to about 20.6 per cent by December 2025, as the bank chased costlier term money. Its net interest margin slid from 5.0 per cent in 2022-23 to 3.76 per cent in 2025-26, and its return on equity from about 19 per cent to 14. Between 2022-23 and 2025-26 the balance sheet nearly doubled, from Rs. 29,162 crore to Rs. 57,727 crore, yet profit rose only from Rs. 547 crore to Rs. 633 crore. In the December 2025 quarter gross NPAs jumped to 1.96 per cent and provisions by 36 per cent, and the share fell 12 per cent in a day. This is a bank running ever harder to stand still.
The exit
In June 2024 Fairfax sold 9.7 per cent of CSB for Rs. 590 crore. Less than a fifth of its stake returned almost half of its original Rs. 1,208 crore. Now Fairfax has said it will sell its remaining 40 per cent once it takes IDBI, because the RBI does not allow one promoter two banks. Reuters reported that a merger of the two might run into union-related hurdles. Fairfax India describes its own objective as “long term capital appreciation”. CSB, it turns out, was a stepping stone. The investor moves on to a bigger prize; the workers stay behind, still on 2015 wages.
Will IDBI meet the same fate?
Read Fairfax’s own announcement. It wants C. VR. Rajendran, who led CSB through the years it stayed out of the 11th Settlement, in IDBI’s leadership group. It plans to fold its Digit insurance companies and IIFL Capital into IDBI at market prices, turning IDBI’s branches into counters for the group’s insurance and investment products, and to fund the purchase partly through potential asset sales. It must bring its stake down to 26 per cent over fifteen years, so this too is an investment with an exit built in. In 2024 the short-seller Muddy Waters accused Fairfax of overstating its book value; Fairfax rejected every allegation, but the regulator ought at least to ask. The government says IDBI’s service conditions will not change. CSB’s staff were inside the industry settlement too, until a private owner decided otherwise. No law compelled it to stay.
The unfinished work of banking
Is India’s banking mission complete, so complete that we can now hand banks to foreign capital? The World Bank’s Global Findex 2025 finds about 89 per cent of Indian adults with an account, but 16 per cent of account owners with no active account, against 4 per cent in other low- and middle-income countries; only 10 per cent of the poorest adults borrowed from a formal lender. A quarter of Jan Dhan accounts in public sector banks, 142.8 million, were inoperative in September 2025. NABARD’s survey for 2021-22 found 52 per cent of surveyed households in debt, 23.4 per cent of farm households still borrowing from moneylenders and other informal sources, and only 44.1 per cent holding a valid Kisan Credit Card.
And who goes to the village? In 2024-25, 67.3 per cent of new public sector bank branches opened in rural and semi-urban India, against 37.5 per cent for private banks. Public sector banks run 29,648 rural branches; private banks 9,342. Fairfax promises to raise India’s credit-to-GDP ratio. Its record at CSB is lending against the gold already in the borrower’s cupboard.
Article 38 of the Constitution asks the State to minimise inequalities of income and opportunity. Article 39(b) and (c) ask that material resources serve the common good and that wealth not concentrate to the common detriment. It was in that spirit that banks were nationalised in 1969. The sale proceeds of IDBI will go towards the government’s disinvestment target for 2026-27. That is fiscal arithmetic, not development, and it sits oddly beside the slogan of Atmanirbhar Bharat.
Why the union matters
CSB shows what a bank looks like when the union is pushed aside: wages frozen, permanent jobs turned into contracts, staff denied leave, safeguards against fraud diluted. The bipartite settlement is not a privilege of bank workers; it is the floor on which the dignity of the profession, and the safety of the depositor’s money, stand. Break it one bank at a time and the floor gives way everywhere. It is telling that, as Reuters reported, union matters are counted among the hurdles in Fairfax’s path. We intend to remain one.
Tomorrow, 16 October, every comrade wears a black badge. Wear it for the policyholders who rescued IDBI, for the farmer still at the moneylender’s door, and for the colleagues in Thrissur who have waited nine years for a wage revision. CSB was the rehearsal. Let IDBI not become the main show.
