IDBI Bank privatisation: EAS Sarma petitions President for CPSE disinvestment review

Former government secretary EAS Sarma has petitioned the President of India to initiate an independent review into the disinvestment of Central Public Sector Enterprises (CPSEs), focusing on the strategic sale of IDBI Bank.

In his representation, Sarma urged the President, in whose name public equity in state-owned enterprises is held, to pause the transfer of ownership and management control of IDBI Bank pending a formal inquiry. He requested that the findings of any such review be submitted to Parliament to evaluate the long-term utility of public sector asset monetization.

Disinvestment process and IDBI Bank ownership structure

The Centre's strategic disinvestment programme aims to streamline public sector capital, encourage private institutional participation, and bolster economic efficiency. The Cabinet Committee on Economic Affairs (CCEA) approved the sale of a 60.72 per cent equity stake in IDBI Bank to Canada-based Fairfax Financial Holdings for ₹52,878 crore. Under the approved structure, the government and the Life Insurance Corporation of India (LIC) will retain minority stakes to maintain ongoing institutional association.

Sarma raised procedural questions regarding the transaction's reserve price and bidding framework. The initial reserve price set during the 2025–26 financial year was ₹94.42 per share. Following preliminary submissions from two foreign bidders, the benchmark was adjusted downward by 19.5 per cent, culminating in the accepted offer of ₹81 per share from Fairfax.

Public enterprise footprint and national contribution

India's public enterprise architecture comprises 475 CPSEs with a combined capital investment of ₹37,12,393 crore, generating ₹3,08,674 crore in annual net profit. Presidential equity holdings in these entities stand at ₹4,50,740 crore, yielding ₹1,38,503 crore in annual dividend revenues.

IDBI Bank, established in 1964 as a development finance institution, operates a network of 2,122 branches nationwide. As of 31 March 2026, the bank managed public deposits totaling ₹3,47,163 crore against a total business volume of ₹6,00,789 crore. The institution employs 19,108 staff members, including 9,500 from SC, ST, and OBC categories, 6,911 women, and 884 employees with disabilities.

In his letter, Sarma contended that public sector entities play a essential role in advancing social equity and supporting government developmental initiatives under the Directive Principles of State Policy. He further noted that earlier proposed disinvestments in Central Electronics Ltd and Pawan Hans were discontinued following public representations.

The government has consistently highlighted that strategic disinvestment unlocks enterprise value, enhances managerial efficiency, and attracts foreign direct investment to strengthen India's financial system.