New Delhi, Oct. 16 -- Fairfax Financial Holdings has cleared the government's hurdle to acquire IDBI Bank, but its bigger test lies inside the lender, where unions are already pushing back and the culture remains closer to a state-run entity.

Banking experts say integration is hard in any deal, and harder when a bank that has operated in the public sector for decades must adopt private-sector practices. A unionised workforce adds to the challenge.

Within hours of the Union Cabinet approving the sale, bank unions voiced their opposition. The United Forum of IDBI Officers & Employees said it "strongly opposes" the sale of a controlling stake to a "foreign entity". The government sought to reassure employees that their service interests wo...