Political battle erupts over IDBI bank disinvestment; Centre and Congress trade barbs
New Delhi, October 30: The political battle over IDBI Bank’s privatisation has intensified, with Congress leader Rahul Gandhi opposing the Centre’s move to sell a major stake in the public sector lender and declaring support for bank employees, stating that public sector banks are instruments of nation-building and not assets for sale, while Union Finance Minister Nirmala Sitharaman strongly countered the allegations, defending the government’s disinvestment policy.
Sitharaman has given a sequential reply to Rahul Gandhi’s allegations in an X post on Friday. Sitharaman said that we all know how the Indian National Congress (INC) used banks and financial institutions as their own private entities, bypassing prudent lending norms and pressuring bank employees to grant loans as per their wishes.
The Finance Minister accused the Congress of exerting political pressure on banks and financial institutions during its tenure. She said that the Modi government has strengthened IDBI Bank through professional management, prudent banking, and a recapitalization of over ₹25,000 crore.
Countering Rahul Gandhi’s allegations, Sitharaman cited the Haridas Mundra case of 1957 to support her allegations. She alleged that in 1976, the then Indira Gandhi government removed the then Chairman of the State Bank of India, R.K. Talwar, for not bowing to political pressure. The
Finance Minister also mentioned the Maruti loan case involving Sanjay Gandhi and the role of then Minister of State for Finance, B. Janardhan Pujari, in the 1980s. She also accused Pawan Kumar Bansal, a former minister in the United Progressive Alliance (UPA) government, of pressuring Canara Bank to lend to businesses linked to his family.
Sitharaman claimed that the National Democratic Alliance (NDA) government inherited IDBI Bank in a precarious financial state. She alleged that IDBI was forced to lend to several large business groups with close ties to Congress leaders, and that many of these loans later turned into non-performing assets (NPAs), causing huge losses to the bank.
The Finance Minister said that the Modi government revived IDBI Bank through professional management, prudent policies, and a recapitalization of over ₹25,000 crore, and the bank is now poised for the next phase of growth. Defending the strategic restructuring process of IDBI Bank, Sitharaman said that all prescribed procedures were followed and the government has already provided clarifications on this matter. Taking aim at Rahul Gandhi, Sitharaman said that his allegations regarding Rafale had also failed and the same would happen in the IDBI case.
Rahul Gandhi shared a letter addressed to IDBI Bank employees on Twitter and criticized the central government over the proposed sale of the bank. He stated in the post, “IDBI was created during the Congress regime to build the country’s industry. During Modi’s tenure, bids were first seen, then the price was decided. Banks were created during the Congress regime. They are sold during Modi’s tenure. I stand with the employees of IDBI Bank.”
In the letter, Rahul Gandhi stated that in March last year, a group of IDBI Bank employees met him in Parliament and questioned why the government was selling a bank that the employees had brought to profit. The Congress leader said he raised the issue in the Lok Sabha, asking the government why a profit-making public sector bank was being sold and how the interests of its employees and depositors would be protected.
He claimed that the government had not provided any reason for the sale and had now decided to sell IDBI Bank to the Canadian company Fairfax. According to Gandhi, IDBI Bank began as a leading development bank and its journey to becoming a commercial bank has been difficult.
He said that seven years ago, IDBI Bank was in the red, while last year it earned a profit of over ₹9,000 crore. Gandhi told the bank employees, “This transformation is the result of your hard work.” The Leader of the Opposition in the Lok Sabha said that an institution built with public funds belongs to the public. He claimed that currently the government and the Life Insurance Corporation of India (LIC) hold a combined 95 percent stake in the bank, which will be reduced to 34 percent after the sale.
Rahul Gandhi said that in 2003, the government had assured Parliament that its stake in IDBI would always remain at least 51 percent. He said that while this promise may not be enshrined in law, a promise made to Parliament is a promise made to the people of India. The Congress leader also claimed that once IDBI Bank becomes privately owned, reservations for Scheduled Caste (SC), Scheduled Tribe (ST), and Other Backward Class (OBC) candidates will be eliminated, and the protection of employees’ service conditions will be affected.
Gandhi stated that public sector banks are not assets to be sold, but rather instruments of nation-building. He urged employees to remain united and resolute.
It is noteworthy that the central government has decided to sell IDBI Bank to Canadian multinational company Fairfax. On October 14th of this month, the Cabinet Committee on Economic Affairs approved Fairfax as a strategic buyer. Fairfax will acquire a 60.72 percent stake for ₹52,878 crore. Currently, the central government and the Life Insurance Corporation of India hold a combined 95 percent stake in the bank.
After this sale, the combined stake of the government and LIC will be reduced to only 34 percent, thereby transferring control of the bank to private hands.
