The government of India is facing a challenging situation as it attempts to sell its stake in the Industrial Development Bank of India (IDBI). Recent reports indicate that there is limited interest from both domestic and global financial institutions. Apart from Kotak Mahindra Bank, CSB Bank, and Emirates NBD, no other financial institutions have shown interest in acquiring the stake.

A significant global trend among major financial institutions is the implementation of a "no new coal" policy for their new investments. According to a study by the Institute for Energy Economics and Financial Analysis, more than 200 globally significant financial institutions have adopted coal exclusion policies. However, in India, only two commercial banks, Federal Bank and Suryoday Small Finance Bank, have such policies, and these were implemented after intervention from the International Finance Corporation (IFC).

In July 2021, IFC invested $126 million to acquire a five percent stake in Federal Bank and subsequently collaborated with the bank to devise a plan to reduce its exposure to coal. The objective is to eliminate coal exposure from its loan books by 2030.

India's banking sector has improved compared to previous years when rising non-performing assets (NPA) caused financial troubles for many banks. The energy sector, particularly coal-fired thermal power plants, contributed significantly to these NPAs. IDBI was particularly at risk and required rescue by Life Insurance Corporation (LIC). Under the leadership of Rakesh Sharma, who took over the bank after LIC's intervention, IDBI's fortunes have improved. However, the bank faces the threat of increased exposure to a declining coal industry, which could undermine its progress. According to data from the Global Coal Exit List, between 2019 and 2021, IDBI provided lending and underwriting services worth over Rs 1,600 crore to various companies involved in coal expansion.