Latest News on IDBI Bank
India Plans to Consolidate State-Run Banks in Next Phase of Mergers, Aiming to Create Lenders of Global Proportions
The Government of India is preparing for the next round of consolidation of public sector banks (PSU banks) with the goal of creating large, globally competitive lenders. The aim is to support India’s long-term economic ambitions and achieve the vision of a developed India by 2047. Finance Minister Nirmala Sitharaman has emphasized the need for several large, world-class banks to raise capital, compete globally, and finance large infrastructure and development projects.
Currently, India has 12 public sector banks, with the State Bank of India (SBI) being the largest, ranking 43rd among the world’s top 50 banks. PSU banks account for nearly 60% of the country’s total banking business, making them strategically important in India’s financial system. The government is considering merging small and mid-sized PSU banks with larger lenders, with banks such as Indian Overseas Bank, UCO Bank, and Bank of Maharashtra potentially being merged with larger banks like SBI, Punjab National Bank, or Bank of Baroda.
This is not the first round of consolidation in the Indian banking sector. Since 2017, the number of PSU banks has decreased from 27 to 12 through a series of mergers. Key mergers include the merger of United Bank of India and Oriental Bank of Commerce with Punjab National Bank, and the merger of Dena Bank and Vijaya Bank with Bank of Baroda. SBI has also absorbed five associate banks and Bharatiya Mahila Bank, expanding its balance sheet and branch network.
In addition to consolidation, the government is also progressing with the strategic disinvestment of IDBI Bank. The Department of Investment and Public Asset Management (DIPAM) Secretary has indicated that the transaction is expected to be completed by March 2026. The government had sold a 51% stake in IDBI Bank to LIC in 2019, and the remaining stake is now slated for sale to private investors. The goal of these efforts is to create a stronger and more competitive banking sector that can support India’s economic growth and development.
India’s Government Eyes $7 Billion Stake Sale in IDBI Bank, with Kotak Mahindra Bank Emerging as a Leading Contender in the Intense Bidding Process
The Indian government is set to take a significant step towards privatizing IDBI Bank Ltd. by inviting bids for its majority stake, valued at $7.1 billion. This move is part of the government’s broader divestment strategy, which aims to reduce its stake in various public sector enterprises. The plan to privatize IDBI Bank has been in the works for some time, and the government is now moving forward with the process.
According to reports, discussions with potential bidders are already at an advanced stage, and a government agency may formally launch the bidding process as early as this month. This would make it one of the largest state-backed bank stake sales in decades. The sale of IDBI Bank’s majority stake is expected to attract significant interest from both domestic and foreign investors, given the bank’s large customer base and extensive network of branches.
The privatization of IDBI Bank is seen as a key component of the government’s plan to reduce its stake in public sector banks and raise revenue. The government has set an ambitious target of raising $28 billion through divestment in the current fiscal year, and the sale of IDBI Bank’s stake is expected to contribute significantly to this target.
The privatization of IDBI Bank is also expected to lead to improvements in the bank’s efficiency and competitiveness, as private sector ownership is likely to bring in new management and operating practices. The bank has been struggling with high levels of non-performing assets and low profitability in recent years, and privatization is seen as a way to turn around its fortunes.
Overall, the sale of IDBI Bank’s majority stake is a significant development in India’s banking sector and is expected to have far-reaching implications for the country’s financial landscape. The government’s decision to privatize the bank is a key step towards achieving its goal of reducing its stake in public sector enterprises and promoting private sector participation in the economy. With the bidding process expected to launch soon, all eyes will be on the sale of IDBI Bank’s stake, which is set to be one of the biggest state-backed bank stake sales in decades.
Financial strain and deteriorating loan portfolios threaten the stability of small microfinance institutions
India’s microfinance sector is facing a severe crisis, with at least half a dozen companies defaulting on bank loans due to asset quality stress and funding crunch. These companies, including VFS Capital, Navachetana Microfin Services, and Arth Finance, are struggling to survive due to a liquidity crunch and difficulties in operating without institutional funding support. The sector’s stress began building in April last year, after a brief revival from the pandemic, and has resulted in a significant increase in late-stage portfolios at risk, with a surge to 15.32% at the end of the September quarter.
The micro-loan market has contracted to ₹3.46 lakh crore, registering a 17% year-on-year drop, with a near 20% fall in the number of active loans to 132 million. Listed microfinance firms, such as Fusion Finance and Spandana Sphoorty Financial, have suffered net losses in the second quarter, extending the run of negative earnings they reported over the past several quarters. Mainstream lenders, including Bandhan Bank, IndusInd Bank, IDFC First Bank, and RBL Bank, have also encountered profitability hits due to the stress in their microfinance portfolios.
VFS Capital, which has a cumulative exposure of ₹143 crore toward five lenders, failed to meet its repayment commitments, with a total overdue amount of ₹82 crore. The company had applied for a small finance bank licence from the Reserve Bank of India (RBI) in January but withdrew it last month after its financial condition worsened. Other affected lenders, including Bank of Maharashtra and IDBI Bank, have told VFS to submit financial statements and a certified book debt statement for the quarters ended June and September.
The situation is similar for Navachetana Microfin Services, which has delayed debt servicing since April and submitted a debt restructuring plan to lenders with the proposal to repay the dues in the next seven years. Some of the company’s loans from banks have already turned into non-performing assets (NPAs) by legal definition. Lenders to these entities have suggested forensic audits to determine the cause of the default and to consider restructuring of bank accounts.
Sectoral leaders are calling for financial institutions to become more lenient while lending to smaller microfinance entities and are expecting the government to consider a proposal to provide a guarantee fund for the microfinance sector. Without institutional funding, several other small lenders are likely to be on the brink of default very soon. The government guarantee programme can facilitate lending to these entities and help them overcome the current liquidity crisis.
Kotak Bank finalizes assessment of IDBI acquisition.
Kotak Mahindra Bank has reportedly completed its due diligence process to acquire the government’s stake in IDBI Bank, making it a strong contender in the race to take over the bank. The due diligence process involved reviewing confidential information such as borrower data, exposure, and loan provisions to assess the bank’s financial health. With Kotak Mahindra Bank’s entry, the competition becomes more interesting, as two global players, Oaktree Capital Management and Fairfax Financial, have already completed their due diligence.
Fairfax Financial already owns a 40% stake in CSB Bank, while Emirates NBD may no longer be in the race after its recent acquisition of RBL Bank. Kotak Mahindra Bank could become the front runner in the race for IDBI Bank, as it is the only domestic contender to buy the government’s stake. The government and Life Insurance Corporation (LIC) hold 94% in the bank, and the transaction could involve acquiring a majority stake of up to 60.72%.
The government aims to finalize the winning bidder by the end of FY26, with the deal potentially valuing IDBI Bank around $8-10 billion. The bank is in advanced discussions with government-appointed advisers, and final financial bids are expected to be invited in the coming quarter. The government first announced its intent to divest IDBI Bank in February 2021, and the formal process began in October 2022, when the Department of Investment and Public Asset Management (DIPAM) invited expressions of interest (EoIs) for the bank’s strategic sale.
By January 2023, DIPAM confirmed it had received multiple EoIs, and around September, four shortlisted bidders who cleared the Reserve Bank of India’s ‘fit and proper’ assessment were granted access to the data room, initiating the buyer due diligence phase. Kotak Mahindra Bank’s spokesperson declined to comment on the development, stating that they would revert with an update if any. The acquisition of IDBI Bank is expected to be a significant deal, and the government is keen to finalize the process by the end of FY26.
Consolidating banking entities to the point of rendering them obsolete
The Indian government’s plan to merge nine public sector banks into three large banks, namely State Bank of India, Punjab National Bank, and Canara Bank, has sparked concern among customers and employees. The move, aimed at enabling these banks to compete with foreign banks, is expected to begin by the end of the next financial year. However, this merger could have far-reaching consequences, including making banking inaccessible to common people, increasing workload, and worsening bank environments.
Bank mergers are not new in India, with several state banks having merged with SBI in the past. Recently, Andhra Bank and Corporation Bank merged with Union Bank, while Dena and Vijaya Banks merged with Bank of Baroda. The real objective behind these mergers was to shift the liability of banks in debt from giving loans to billionaires. Apart from mergers, the privatization of banks is also underway, with IDBI Bank being privatized and Yes Bank being taken over by Japan’s Sumitomo Mitsui Banking Corporation.
The central government’s move to privatize and merge public sector banks has been criticized for forgetting the role that these banks played in keeping the country safe during the global financial crisis. Big banks have no interest in ordinary, rural, and farmer accounts, and have recently imposed minimum balance requirements, making it difficult for ordinary people to access banking services. This could lead to a shift from mass banking to class banking, where only the wealthy have access to banking services.
The merger is expected to lead to widespread closure of branches, voluntary retirement, and compulsory retirement, which will adversely affect services. Customers will be forced to accept unilaterally imposed service charges and penalties. The banking sector is heading from nationalization to privatization and eventually to foreignization, which will have adverse effects on the economy and common people. The government’s move has been criticized for being anti-poor, as it will only benefit the wealthy and large corporations.
The privatization of banks will also lead to a loss of benefits that society achieved through nationalization of banks. Small borrowers are being tied up with laws like SARFAESI, while corporate loans worth crores continue to be written off. The decline in the number of banks will also adversely affect services, and customers will be forced to accept poor services and high charges. The government’s move has been criticized for being a shift from pro-people policies to pro-corporate policies, which will have far-reaching consequences for the economy and common people.
Stock Market Updates of IDBI Bank
Recent Updates
Ten major banks are set to unveil their Q2 financial reports this Saturday, October 18, offering a glimpse into their performance.
On October 18, 10 banks in India, including both private and public sector lenders, are set to announce their September quarter earnings. The list of banks includes HDFC Bank, ICICI Bank, YES Bank, Punjab National Bank, IDFC First Bank, IndusInd Bank, IDBI Bank, The Federal Bank, RBL Bank, and J&K Bank. Other notable companies that will announce their Q2 earnings are UltraTech Cement, UTI AMC, SML Isuzu, and Can Fin Homes.
Analysts expect the Q2 earnings for India Inc. to rebound after a muted Q1, supported by a mix of cyclical and structural factors. The financial sector is expected to be a key driver of overall earnings growth. Banks and non-banking financial companies (NBFCs) are benefiting from steady credit demand across retail, agriculture, and MSME segments, while asset quality has remained stable. Despite slight pressure on net interest margins, profitability is being supported by healthy loan growth, controlled slippages, and recoveries from past stressed accounts.
In terms of asset quality, analysts expect a comfortable outcome for large banks, with private banks appearing to be more comfortable lending aggressively in unsecured segments such as credit card and personal loans. Mid-size banks are expected to see improvement in microfinance asset quality, although credit costs will remain elevated. The focus will be on forward flows in early delinquency buckets and X bucket collection efficiency.
Regarding margins, most analysts believe that margins have bottomed out in Q2FY26, but the decline will be limited for mid-size banks. Public sector banks are expected to witness relatively lower QoQ margin decline, while large private banks are expected to see a sharper decline. The net interest margin (NIM) for Axis Bank, which has already announced its Q2 earnings, came in at 3.73% for the quarter. The bank reported a 26% decline in standalone net profit to ₹5,089.64 crore annually for the quarter ended September 2025.
Overall, the Q2 earnings announcements are expected to be closely watched by investors, with a focus on asset quality, margins, and profitability. The financial sector is expected to be a key driver of overall earnings growth, and the performance of the banks will be closely monitored.
DFS Secretary says government is on track to finalize IDBI Bank stake sale by end of fiscal year 2026.
The government of India has announced plans to undertake an Offer for Sale (OFS) in five public sector banks. The banks in question are Bank of Maharashtra, Indian Overseas Bank, UCO Bank, Central Bank of India, and Punjab and Sind Bank. The primary objective of this move is to reduce the government’s stake in these banks to below 75%. This development is in line with the government’s previous disclosures regarding its plans to dilute its ownership in these financial institutions.
The OFS is expected to have a significant impact on the banking sector, as it will lead to increased private participation in these banks. By reducing its stake, the government aims to infuse fresh capital, improve efficiency, and enhance the overall competitiveness of these banks. The move is also seen as a step towards consolidating the banking sector and making it more resilient to external shocks.
Meanwhile, Axis Bank’s managing director and chief executive, Amitabh Chaudhry, expressed his bank’s enthusiasm for lending to entities seeking acquisition finance. He noted that foreign lenders currently dominate this segment, and Axis Bank is keen to capitalize on this opportunity. Chaudhry also highlighted the relatively new field of private credit, which offers immense potential for growth.
The private sector lender’s interest in acquisition finance is a significant development, as it indicates a shift in the bank’s strategy towards catering to the growing needs of corporate clients. With the government’s plans to divest its stake in public sector banks, private lenders like Axis Bank are likely to play a more prominent role in the banking sector. As the Indian economy continues to grow, the demand for acquisition finance is expected to increase, and Axis Bank is well-positioned to tap into this opportunity.
Overall, the government’s plan to undertake an OFS in five public sector banks and Axis Bank’s interest in acquisition finance are positive developments for the Indian banking sector. These moves are expected to lead to increased private participation, improved efficiency, and enhanced competitiveness, ultimately contributing to the growth and stability of the economy.
HDFC Bank Sees 9% Surge in Loans, While Kotak, IDBI, and UCO Banks Deliver Positive Q2 Results in Latest Business Updates
The Indian banking sector has reported strong loan and deposit growth in the July-September 2025 quarter, with both private and public sector lenders showing healthy numbers. HDFC Bank, Kotak Mahindra Bank, IDBI Bank, and UCO Bank all posted double-digit increases in their loan books, reflecting continued momentum in credit demand.
HDFC Bank reported a 9% year-on-year growth in loans, which stood at Rs 27.9 lakh crore as of September 30, 2025. The bank’s total advances under management rose to Rs 28.6 lakh crore, up 8.9% from Rs 26.3 lakh crore a year earlier. Total deposits increased 15.1% to Rs 27.1 lakh crore, compared with Rs 23.5 lakh crore in the year-ago period.
Kotak Mahindra Bank posted a 15.8% rise in advances to Rs 4.62 lakh crore during Q2 FY26, compared with Rs 3.99 lakh crore in the same quarter of the previous fiscal. The bank’s total deposits grew 14.6% to Rs 5.28 lakh crore, up from Rs 4.61 lakh crore a year earlier.
IDBI Bank reported a 15% year-on-year growth in its credit book, with net advances rising to Rs 2.3 lakh crore as of September 30, 2025, compared with Rs 2 lakh crore last year. Total deposits stood at Rs 3.03 lakh crore, up 9% from Rs 2.77 lakh crore a year ago.
UCO Bank reported a 13.29% year-on-year rise in total business to ₹5.37 lakh crore in the September 2025 quarter. Total advances grew 16.67% to Rs 2.31 lakh crore, from Rs 1.98 lakh crore in the same period last year. Deposits increased 10.87% year-on-year to Rs 3.06 lakh crore, compared with Rs 2.76 lakh crore last year.
The latest updates from major lenders indicate that credit demand across retail, corporate, and MSME segments remains strong in FY26 so far. Their Q2 results, including revenue, net profit, and NPAs, will be released this month. The strong growth in both loans and deposits underscores continued traction across various segments, suggesting a positive outlook for the banking sector.
The growth in loans and deposits is a positive sign for the economy, as it indicates that businesses and individuals are taking on more credit, which can lead to increased economic activity. The banks’ ability to grow their loan books and deposits also suggests that they are able to effectively manage their risk and provide credit to those who need it.
Overall, the Q2 business updates from HDFC Bank, Kotak Mahindra Bank, IDBI Bank, and UCO Bank suggest that the banking sector is on a strong footing, with healthy growth in loans and deposits. This is a positive sign for the economy and suggests that the sector will continue to play a crucial role in supporting economic growth.
The performance of these banks is likely to have a positive impact on the overall economy, as they are major players in the financial sector. The growth in loans and deposits is expected to continue, driven by strong credit demand across various segments. The banks’ focus on managing risk and providing credit to those who need it is also expected to continue, which will help to support economic growth.
In conclusion, the Q2 business updates from major lenders suggest that the banking sector is on a strong footing, with healthy growth in loans and deposits. This is a positive sign for the economy and suggests that the sector will continue to play a crucial role in supporting economic growth. The strong growth in loans and deposits is expected to continue, driven by strong credit demand across various segments.
CBI drops corruption case against former IDBI Deputy MD, who is still under investigation for alleged role in Kingfisher Airlines loan scandal
The Central Bureau of Investigation (CBI) has closed a case of disproportionate assets against former IDBI Deputy Managing Director BK Batra. Batra was being investigated for allegedly amassing Rs 1.69 crore of assets disproportionate to his known source of income during his tenure at the bank from 2008 to 2016. The CBI had initiated the probe after finding credit entries of Rs 60 lakh in Batra’s bank account, which were suspected to be “accommodation entries” routed through shell companies.
However, during the investigation, it was found that Batra had sold his flat to a Gurugram resident and received an advance of Rs 60 lakh for its sale. This amount was a significant chunk of the disproportionate assets calculation. When removed, the alleged questionable assets would be less than 10 percent of the total legal income, below the threshold fixed by the Supreme Court for a probe. As a result, the CBI decided to file a closure report in the matter, which was recently accepted by a special court.
Batra is still under investigation in a Rs 950 crore loan fraud case against Kingfisher Airlines, which was owned by fugitive liquor baron Vijay Mallya. The CBI has alleged that Batra colluded with Mallya in sanctioning loans to the airline without following due diligence procedures. Batra was arrested in 2017 in connection with the case and was listed as accused number 8 in the CBI chargesheet. His application seeking discharge from the case was rejected by a special court in Mumbai last year.
The CBI has alleged that Batra’s responsibility in the Kingfisher Airlines scam is “second only to the CMD”. The agency has accused Batra of being involved in all three sanctions to the airline, which turned into non-performing assets and were later declared as fraud. The closure of the disproportionate assets case against Batra does not affect the ongoing investigation into the Kingfisher Airlines loan fraud case. The CBI will continue to investigate Batra’s role in the scam, and he may still face charges and penalties if found guilty.
IDBI Bank Extends Utsav FD Offer with Up to 7.30% Interest: Revised Fixed Deposit Rates Announced, Check the Latest Rates to Invest
IDBI Bank has revised its fixed deposit interest rates, effective from September 19, 2025. The bank offers FD interest rates between 3% and 6.55% for general citizens and between 3.50% and 7.05% for senior citizens, for tenures ranging from 7 days to 10 years. The interest rates for various maturity slabs are as follows: 3% for 7-30 days, 4.5% for 46-60 days, 5.5% for 91 days to 6 months, and 6.55% for 1 year to 2 years.
The bank also offers special fixed deposit schemes, including the IDBI Utsav Fixed Deposit, which has been extended until March 31, 2026. This scheme offers tenures of 444, 555, and 700 days, with interest rates ranging from 6.50% to 6.65% for general citizens and 7.00% to 7.15% for senior citizens.
Additionally, IDBI Bank has introduced the IDBI Chiranjeevi-Super Senior Citizen FD, exclusively for resident individuals aged 80 years and above. This scheme offers interest rates of 7.25% for 444 days, 7.30% for 555 days, and 7.15% for 700 days.
The bank charges a 1% penalty on the applicable rate for deposits closed prematurely, involving both partial withdrawals and sweep-ins. The interest payable on prematurely withdrawn deposits will be the rate applicable for the amount and the period for which the deposit remained with the bank.
Other notable fixed deposit schemes offered by IDBI Bank include the Tax Saving FD, which offers a 5-year tenure with an interest rate of 6.35% for general citizens and 6.85% for senior citizens, and the Vasundhara Green Deposit, which offers a 1111-day tenure with an interest rate of 6.35% for general citizens and 6.85% for senior citizens. Overall, IDBI Bank’s revised fixed deposit interest rates aim to provide competitive returns to its customers, while also offering specialized schemes for senior citizens and super senior citizens.
IDBI Bank Stake Sale Reaches Crucial Phase, Financial Bids Anticipated by Third Quarter of FY26
The IDBI Bank stake sale is approaching a significant milestone, with financial bids expected to be submitted in the third quarter of FY26. The Indian government and Life Insurance Corporation (LIC) of India, the bank’s majority owners, are keen to divest their stake in the lender. The stake sale is expected to be one of the biggest banking transactions in the country.
The government and LIC together own around 94% of IDBI Bank, and the plan is to sell a majority stake to private investors. The sale process is being managed by the Department of Investment and Public Asset Management (DIPAM), which has already invited expressions of interest (EOIs) from potential bidders. Several prominent players, including private equity firms and banks, have shown interest in acquiring a stake in IDBI Bank.
The stake sale is expected to be completed through a competitive bidding process, with multiple rounds of bidding. The government and LIC are looking to raise a significant amount from the sale, which will help to boost the country’s economy. The exact valuation of the stake sale has not been disclosed, but it is expected to be one of the largest banking transactions in India.
The sale of IDBI Bank is part of the government’s broader plan to divest its stake in public sector enterprises and raise funds for developmental projects. The government has set a target of raising Rs 65,000 crore from disinvestment in the current fiscal year, and the IDBI Bank stake sale is expected to be a significant contributor to this target.
The sale process is expected to gain momentum in the coming months, with the submission of financial bids in the third quarter of FY26. The bidders will be required to submit their financial bids, which will be evaluated by DIPAM and other stakeholders. The winning bidder will be selected based on the highest bid price and other criteria, such as the bidder’s experience and expertise in the banking sector.
Overall, the IDBI Bank stake sale is a significant development in the Indian banking sector, and its outcome will be closely watched by investors, analysts, and policymakers. The sale is expected to have a positive impact on the country’s economy, as it will help to raise funds for developmental projects and promote private sector participation in the banking sector.
SLCM collaborates with IDBI Bank and Punjab & Sind Bank to launch comprehensive collateral management solutions nationwide in India
Sohan Lal Commodity Management Limited (SLCM), a leading post-harvest logistics and Agri-solutions company in India, has announced its collaboration with IDBI Bank and Punjab & Sind Bank to provide unified collateral management services across the country. This partnership marks a significant milestone for SLCM, expanding its portfolio to 27 banking partners across India and Myanmar. The company’s goal is to provide innovative, technology-driven solutions for collateral management, ensuring transparency, efficiency, and scalability across the agriculture value chain.
According to Sandeep Sabharwal, Group CEO of SLCM, the partnership reflects the growing trust in SLCM’s scientific and industry-proven collateral management and warehousing services. With over 16 years of market leadership, SLCM has consistently driven innovation in Agri Supply Chain Management. The company’s technology-driven storage and risk management solutions, combined with the financial strength of the banks, will ensure secure, transparent, and scalable Agri-financing.
SLCM’s extensive network covers 22 states across India, with over 20,742 warehouses and 96 cold storage facilities. The company offers post-harvest solutions for more than 1274 commodity variants, including cotton, pulses, maize, spices, and other staples. Through this partnership, farmers will gain access to comprehensive financing and collateral management services. The company has demonstrated remarkable growth, generating storage receipts worth ₹88,219 crore to date, with a 257% surge in the past five years.
SLCM will leverage its patented and industry-proven technology platform ‘Agri Reach’ to enable real-time monitoring of Agri-commodities and ensure efficient, transparent, and secure storage. Agri Reach has significantly reduced post-harvest losses from the industry average of 10% to just 0.5%, directly benefiting millions of farmers, FPOs, and agri-businesses across the supply chain. The company’s proprietary technology remains committed to supporting future growth and innovation, further strengthening its ability to deliver secure and scalable warehousing solutions.
The partnership is expected to further financial inclusion and strengthen India’s agricultural economy. Salman Ullah Khan, CBO cum Director of SLCM, expressed that the company’s warehousing business has been growing steadily, driven by the strong trust that stakeholders place in SLCM’s capabilities. The growth reflects the robustness of the company’s model and the tangible value it brings to the Agri ecosystem. By ensuring transparency, reliability, and innovation in its services, SLCM is strengthening the Agri-finance value chain and creating long-term benefits for farmers, traders, and financial institutions alike.