IDBI Bank disinvestment process to continue, says FM Nirmala Sitharaman
Pune, Apr 24, 2026
An IBA committee will look at the issues pertaining to distribution tie-ups of banks for third-party products
The disinvestment process for Life Insurance Corporation of India (LIC) and government-backed IDBI Bank will continue, Finance Minister Nirmala Sitharaman said on Friday, amid reports that the Centre had scrapped the proposed stake sale after bids fell short of the reserve price.
The bank’s shares jumped as much as 8 per cent after the minister’s remarks, before closing 3.5 per cent higher on the BSE at ~76.26. The Union government is looking to sell its 30.48 per cent stake, while LIC plans to divest 30.24 per cent in the bank.
Speaking on the sidelines of an event to inaugurate SBI’s new local head office (LHO), Sitharaman said a committee of bankers was looking into whether banks be allowed exclusive distribution tieups for selling third-party products or adopt an open architecture model. SBI Life closed 3.29 per cent lower at ~1,767.30 per share on Friday. SBI Life has an exclusive tieup with the country’s largest lender for selling life insurance products.
“These are things the committee under the Indian Banks’ Association (IBA) chairman will sit and work,” the FM said. “The IBA would engage with banks to understand how best to go about it, what are the vulnerabilities by keeping one, by keeping several — all these are going to be worked upon,” she added.
Recently, the issue of the open architecture model came into focus after reports that Department of Financial Services Secretary M Nagaraju asked banks to avoid exclusive tieups with their own insurance subsidiaries and instead remain neutral. Among insurers, SBI Life derives almost 60 per cent of its business from the bancassurance channel, a substantial portion of which comes from SBI.
Additionally, Sitharaman said the high-level banking committee announced in this year’s Budget would assess how Indian banks need to evolve to meet the challenges of 2047 and identify the growth required to achieve that goal.
“Their recommendations will guide how Indian banking may need to be refashioned, if required. The focus will be on building future-ready banks — large institutions that understand the needs of the Indian economy,” she said. The committee’s terms of reference and members are yet to be announced.
Highlighting global economic conditions, Sitharaman said despite volatility driven by geopolitical conflicts and tariff concerns, India’s domestic consumption remains resilient, sustaining economic growth that continues to be the fastest in the world.
However, sustaining this momentum will require consistent and predictable support from banks across sectors such as manufacturing, agriculture, information technology, and services, the minister said.
While Indian exporter have somewhat suffered due to the ongoing geopolitical issues, they have been able to find newer markets.
“Unless domestic manufacturing, agricultural growth, tourism, and the IT and related services sectors are given constant and predictable support, it will be difficult to sustain India’s growth story. In this, banks have a very important role to play,” she added.
India’s economy grew 7.8 per cent year-on-year in the October-December quarter, down from 8.4 per cent in the previous quarter. For FY26, growth is estimated at 7.6 per cent, keeping India the fastest-growing major economy globally.
Sitharaman highlighted that the systems of domestic banks, which so far has protected the consumers, may not be sufficient to deal with the emerging challenges linked to artificial intelligence models like Anthropic’s Claude Mythos.
Her comments came a day she met heads of banks to assess cybersecurity risks associated with such technologies. During the meeting, Sitharaman asked banks to take proactive measures to secure IT systems, safeguard customer data, and protect financial resources. Banks were also advised to promptly report suspicious activities to relevant authorities, including CERT-In, and maintain close coordination with all concerned agencies.
“It has always been the case that banks in India, due to increasing digitisation over the decades, are adequately prepared for challenges arising from technology-related risks… Indian banks have performed very well in this regard, with no major incidents over the decades. Each time, they have stayed ahead of the curve,” Sitharaman said on Friday.
“However, a new challenge has emerged in the form of Mythos. Not much is known about it yet. The Ministry of Electronics and Information Technology is actively engaging with authorities and governments across the globe, as well as with technology companies, to understand how this will evolve and what kind of preparedness is required in India. Yesterday’s meeting was held in this context,” she added.
While banks have so far demonstrated that they are careful and protective of their customers, this may not be sufficient going forward, she added.
“There is a need for new and more versatile measures to counter emerging threats,” she said, adding that there would be extensive interactions among banks, under the aegis of IBA, to assess investment needs, adopt new technologies, and leverage artificial intelligence to counter evolving threats.
SBI’s new LHO will serve most of Maharashtra, except the Mumbai metropolitan area and the Konkan region, which will continue to be handled by the Mumbai LHO.
[The Business Standard]
