UPDATE 1 — India's IDBI Bank drops after Fairfax buys controlling stake for $5.56 billion

(Adds details paragraph 2 onwards) Oct 15 (Reuters) — Shares of IDBI Bank fell 6.4% on Thursday, a day after the Indian government approved the sale of a controlling stake in the lender to Fairfax Financial Holdings in a $5.56 billion deal. The government on Wednesday cleared the sale of a 61% stake in IDBI Bank to Fairfax and its affiliates, moving ahead with India's biggest ever cross-border bank deal. Fairfax will offer 81 rupees per share for IDBI Bank, above the benchmark price of 75.99 per share determined by the government based on fair valuations, but at a 10.4% discount to the lender's closing price on Wednesday. The stock surged as much as 12.9% on Wednesday ahead of the news, before ending 9% higher. It is down 17.5% so far this year. (Reporting by Kashish Tandon in Bengaluru; Editing by Ronojoy Mazumdar) ((Kashish.Tandon@thomsonreuters.com; 8800437922;)