The Finance Minister defends the proposed stake sale, while the Congress leader has questioned its impact on public ownership and employees
Political exchange over IDBI disinvestment
Finance Minister Nirmala Sitharaman has responded to Rahul Gandhi’s criticism of the proposed IDBI Bank stake sale, accusing previous Congress governments of political interference in public sector banking. The exchange has added a political dimension to the government’s plan to transfer majority ownership of the lender.
Rahul Gandhi raises concerns about public ownership
Rahul Gandhi has backed IDBI Bank employees opposing the proposed transaction. In an open letter, he argued that public sector banks were built with public money and should continue serving the country’s development. He also raised concerns about the possible impact on employees, depositors and reservation-related protections after privatisation.
Sitharaman alleges political influence on lending
In her response, Sitharaman alleged that Congress-led governments treated banks as personal entities and influenced lending decisions. She referred to the removal of former State Bank of India chairman R.K. Talwar in 1976, claiming it followed his refusal to relax lending conditions for a company associated with Sanjay Gandhi’s circle.
Finance Minister cites bad loans and recapitalisation
Sitharaman also referred to loans involving business groups such as Videocon, Winsome, ABG Shipyard and Kingfisher, saying that some became non-performing assets and contributed to IDBI Bank’s financial difficulties. She credited the NDA government with providing more than Rs 25,000 crore in recapitalisation support and changing management and lending practices. These points reflect the Finance Minister’s account of the bank’s history.
Proposed transaction and regulatory process
The government has approved the proposed sale of a combined 60.72 per cent stake in IDBI Bank to Canada-based Fairfax Financial Holdings for around Rs 53,000 crore. The proposed sale comprises the government’s 30.48 per cent holding and LIC’s 30.24 per cent stake. The transaction remains subject to required regulatory approvals, including clearance from the Reserve Bank of India.
Employees’ future remains part of the debate
Rahul Gandhi has questioned whether the sale could affect employees’ service conditions and the bank’s public-sector character. The employees’ association has also expressed concerns and called for transparency. The government has defended the process, while Congress has questioned whether the proposed transfer of majority ownership serves the interests of employees and the public.