Kerala-based CSB Bank may disappear if Fairfax's ₹53,000-cr deal goes through

Kochi: Another Kerala-headquartered bank could lose its independent identity if Canadian investment firm Fairfax Financial Holdings is set to become the majority stakeholder in IDBI Bank.

According to reports, Fairfax, the promoter of CSB Bank (formerly Catholic Syrian Bank), has emerged as the highest bidder to acquire a 60.72% stake in IDBI Bank for around Rs 53,000 crore. If the deal goes through, CSB Bank is expected to be merged with IDBI Bank because the Reserve Bank of India (RBI) does not permit a single promoter to control more than one bank.

The Union government currently holds a 45.48% stake in IDBI Bank, while the Life Insurance Corporation of India (LIC) owns nearly 50%. Under the proposed transaction, the Centre will sell 30.48% of its stake, and LIC will divest 30.24%, with each expected to receive around Rs 26,000 crore.

The government has been trying to privatise IDBI Bank for more than 5 years and is now moving ahead after receiving a better valuation. Fairfax has reportedly offered Rs 81 per share, an improvement over its Rs 75 per share bid made last year. However, IDBI Bank’s shares closed at Rs 86.30 on Wednesday, giving the lender a market capitalisation of Rs 92,793 crore. As of March 31, 2026, the bank’s total business, including deposits and advances, had crossed Rs 6 lakh crore.

Reports suggest that Emirates NBD was also in the race to acquire the bank but submitted a lower bid. IDBI Bank, however, has clarified that it has not yet received any official communication from the Central government regarding the proposed sale.

Fairfax, controlled by Canadian billionaire Prem Watsa, acquired a 51% stake in Thrissur-based CSB Bank in 2018. Since RBI regulations prohibit a single promoter from owning controlling stakes in multiple banks, a successful acquisition of IDBI Bank would almost certainly require Fairfax to merge the much smaller CSB Bank into IDBI Bank.

The contrast in the size of the two lenders is significant. IDBI Bank has a market capitalisation of Rs 92,793 crore and a total business exceeding Rs 6 lakh crore, while CSB Bank’s market value stands at Rs 6,346 crore and its total business remains below Rs 1 lakh crore.

If the merger takes place, CSB Bank would become the third Kerala-based bank to lose its independent identity in the past two decades. Lord Krishna Bank was first merged with Centurion Bank of Punjab, which was later absorbed by HDFC Bank in 2008. State Bank of Travancore (SBT) also ceased to exist after it was merged with the State Bank of India (SBI) along with the SBI’s associate banks in 2017.