Congress demands high-level probe into IDBI Bank sale and questions valuation

The Congress party has demanded an immediate halt to the proposed sale of IDBI Bank to Canada's Fairfax Financial Holdings along with a Joint Parliamentary Committee probe into the transaction. The party alleged that the government manipulated the bank's valuation and that the foreign buyer plans to use the bank's own funds to finance the acquisition.

Valuation Concerns

Addressing a press conference on Monday, senior Congress leader Shaktisinh Gohil claimed the disinvestment process lacked transparency and was riddled with irregularities. He stated that the government initially fixed the valuation at ₹94.42 a share before inviting bids, but later revised it downwards to ₹75 a share before finally settling at ₹81 a share. Congress general secretary Jairam Ramesh described the transaction as a major scam and demanded that all valuation reports be made public.

Financial Strength

Mr. Gohil questioned the logic of selling a profitable Indian institution to a foreign company. IDBI Bank earned a cumulative profit of ₹30,105 crore between 2021 and 2026, with non-performing assets at roughly 2%. Its profit per employee reached ₹49.8 lakh, making it a leading bank on this measure. The government approved the sale of a 60.72% stake to Fairfax for about ₹53,000 crore on October 14, with completion expected by the end of the financial year subject to regulatory clearances.

Context

Major disinvestment deals involving public sector banks often draw intense political scrutiny over asset valuation, public sector status, and the protection of employee reservation policies. IDBI Bank has long operated as a key financial institution in India, making changes to its ownership structure a matter of significant public interest.