Centre defends IDBI Bank sale as Rahul Gandhi backs protesting employees

Leader of the Opposition Rahul Gandhi has questioned the central government's decision to sell IDBI Bank to Canadian firm Fairfax Financial Holdings, prompting a sharp counterattack from Union Finance Minister Nirmala Sitharaman. The government approved the sale of a 60.72 percent stake in IDBI Bank for about ₹53,000 crore, marking the largest foreign investment in an Indian bank.

Employee Concerns

Mr. Gandhi wrote an open letter to bank employees expressing solidarity and asserting that public banks are nation-building tools rather than assets to be sold. He noted that the government and LIC currently own 95 percent of the bank, but their combined stake will drop to 34 percent after the transaction. He also warned that private ownership would remove job reservations for Scheduled Castes, Scheduled Tribes, and Other Backward Classes while weakening employee service conditions. The Congress leader pointed out that the bank earned a profit of over nine thousand crore rupees last year after years of financial losses, and highlighted a 2003 parliamentary promise that the government would retain at least a 50 percent stake.

Government Position

The Department of Investment and Public Asset Management stated that the second round of bidding was conducted under procedures determined by the Core Group of Secretaries on Disinvestment, following an unsuccessful initial round. The agency clarified that reserve prices were not altered and bids were submitted confidentially without pre-determined benchmarks. Meanwhile, Finance Minister Nirmala Sitharaman strongly defended the move and accused the Congress party of using banks as personal entities during its tenure, alleging that past administrations forced institutions to extend loans to well-connected business groups.

Context

IDBI Bank began its journey as a pioneering development institution before transitioning into a commercial bank, navigating a major financial turnaround in recent years. The current divestment reflects the broader ongoing push towards banking privatisation in India.