New Delhi, Oct 30: Amid the IDBI bank disinvestment row, Congress leader Rahul Gandhi has expressed solidarity with the employees and questioned the government’s decision to sell off the profitable public bank to a Canadian firm.
The Leader of Opposition in Lok Sabha asserted that public banks are not assets to be sold off, they are tools to build the nation.
Hitting back, Finance Minister Nirmala Sitharaman said the Congress used banks and financial institutions as “personal entities” and pressured bank employees to extend loans at their whim, bypassing prudent lending norms.
She also cited several instances from the Congress-led government, including the removal of SBI chairman R K Talwar in 1976 under Indira Gandhi’s rule after he allegedly refused to give in to political pressure to relax lending norms for a company linked to Sanjay Gandhi.
In a letter addressed to members of the IDBI bank family on Thursday, Gandhi said that in March last year, a group of employees of the bank came to meet him in Parliament House and asked him a simple question as to why the government is selling a bank that they had made profitable.
“I took that question to the Lok Sabha. I asked why a profitable public bank was being sold and how its employees and depositors would be protected. The government gave no reason. Now it has decided to sell IDBI Bank to Fairfax, a Canadian company,” Gandhi said.
Noting that IDBI began as a pioneering development bank, he said the journey to a commercial bank has been difficult, but the employees have faced the challenges.
“Seven years ago, IDBI was losing money. Last year, it earned a profit of over nine thousand crore rupees. That turnaround is your work,” he said in his open letter to bank employees.
An institution built with public money belongs to the public, Gandhi asserted.
Today, the government and LIC own 95 per cent of this bank. After the sale, they will own 34 per cent, he pointed out in the letter dated October 29.
In 2003, the government promised Parliament that it would always hold at least 50 per cent of IDBI, he said.
“That promise may not be written into law, but a promise made to Parliament is a promise made to the people of India,” Gandhi asserted.
When IDBI is privately owned, reservation for SC, ST and OBC candidates will go with it, he said.
“Your service conditions, already weakened, will lose their last protection. The Congress has always believed in a strong public sector working alongside the private sector. Public banks are not assets to be sold off, they are tools to build the nation,” Gandhi stressed.
“You asked me to stand with you. I stand with you in your fight today, and fully support all your legitimate demands. Stay together. Stay determined,” the former Congress chief said.
Tagging his letter on X on Friday, Gandhi said, “During Congress’s time, IDBI was established to build the nation’s industry. During Modi’s time, first the bidding was seen, then the price was set.”
“During Congress’s time, banks were being created. During Modi’s time, they are being sold. I stand with the employees of IDBI Bank,” he said.
On Gandhi’s remarks, Sitharaman said, “IDBI Bank was handed over to us in poor shape, as IDBI itself was forced to lend to large business groups with close connections to @INCIndia leaders such as Videocon, Winsome, ABG Shipyard, and Kingfisher.
“These turned into bad loans, causing huge losses for IDBI Bank, which we recognised,” she said in a social media post.
“The NDA govt led by Hon’ble PM Shri @narendramodi revived the IDBI Bank through professionalism, prudence and recapitalisation of more than Rs 25,000 crores. The IDBI Bank is now poised for its next phase of growth,” the minister asserted.
All due process has been followed in the IDBI Bank strategic restructuring, she added.
On Thursday, the Department of Investment and Public Asset Management (DIPAM) said the second round of bidding for strategic disinvestment of IDBI Bank was conducted under a procedure determined by the Core Group of Secretaries on Disinvestment (CGD), which was empowered by the Cabinet Committee on Economic Affairs (CCEA) to address procedural issues and deviations.
The initial round of bidding was conducted in the financial year 2025-26, but the bids were not approved, following which the first round became functus officio, or ceased to have further effect, the DIPAM said in a statement.
The clarification followed questions raised by many, including the bank union, regarding IDBI Bank’s valuation and bid price by the proposed bidder Fairfax of Canada. The government on October 14 approved the sale of a 60.72 per cent stake in IDBI Bank to Canada’s Fairfax Financial Holdings for about Rs 53,000 crore (USD 5.5 billion), in what would be the largest foreign investment in an Indian bank and a major milestone in the country’s long-delayed banking privatisation drive.
The strategic transaction of IDBI Bank is expected to be completed by the end of the current financial year, subject to regulatory clearance from the Reserve Bank of India.
