New Delhi, Oct. 14 -- Canadian billionaire Prem Watsa-led Fairfax Financial Holdings will acquire a 60.72% stake in IDBI Bank for approximately Rs.53,000 crore ($5.5 billion), marking what would be the largest foreign investment in an Indian bank and a significant step in the government's banking privatisation programme.

The Cabinet Committee on Economic Affairs (CCEA) has approved Fairfax subsidiary M/s 10955230 Canada Inc as the strategic buyer for the proposed acquisition. The transaction involves the government's 30.48% stake in IDBI Bank, valued at approximately Rs.26,620 crore, and a 30.24% stake held by state-owned Life Insurance Corporation of India (LIC), valued at around Rs.26,440 crore.

The proposed sale is expected to reduce...