'Banks are Being Sold': Rahul Gandhi Slams IDBI Bank Stake Sale
Rahul Gandhi criticizes the Modi government for selling IDBI Bank to a Canadian firm, claiming public banks are tools for nation-building, not assets.
Leader of the Opposition in the Lok Sabha, Rahul Gandhi, has launched a scathing attack on the Centre's decision to sell a controlling stake in IDBI Bank. Expressing his solidarity with the bank's employees, Gandhi alleged that while the Congress party focused on establishing banks to build the nation, the Modi government is focused on selling them off.
A Clash of Visions: Nation Building vs. Privatisation
Taking to X (formerly Twitter), Rahul Gandhi drew a sharp contrast between the ideological approaches of the Congress and the BJP regarding public sector banking. He pointed out that IDBI was originally established during the Congress era with the specific vision of strengthening India's industrial growth.
"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," Gandhi wrote.
Concerns Over Employee Welfare and Reservations
In a detailed letter addressed to the employees of IDBI Bank, Rahul Gandhi highlighted the potential risks associated with the privatisation process. He recalled a meeting with bank employees in Parliament last March, where they questioned why a bank they had worked hard to make profitable was being sold.
Gandhi raised several critical concerns regarding the transition to private ownership:
- Reservation Policies: He claimed that once IDBI becomes privately owned, the reservations for SC, ST, and OBC candidates would vanish.
- Service Conditions: He argued that the service conditions of employees, which he described as already weakened, would lose their final layer of protection.
- Public Sector Role: Gandhi reiterated that the Congress believes in a strong public sector that works alongside the private sector, asserting that public banks are "tools to build the nation" rather than assets to be liquidated.
The Deal: IDBI Bank and Fairfax Financial Holdings
The controversy stems from the Union Cabinet's approval on October 14 of a massive deal worth Rs 52,878 crore (approximately USD 5.56 billion). The government plans to sell a 60.72 per cent controlling stake in IDBI Bank to a subsidiary of Canada's Fairfax Financial Holdings.
The breakdown of the divestment is as follows:
- The Government of India will sell its 30.48 per cent stake.
- The Life Insurance Corporation of India (LIC) will divest 30.24 per cent.
Once the transaction is complete, the government's shareholding will drop to 15 per cent, and LIC's will decrease to 19 per cent.
Government Clarification on Bidding
Amidst the political firestorm, the Finance Ministry issued a clarification regarding the bidding process. The ministry stated that the reserve price for the strategic restructuring of IDBI Bank remained unchanged during the second bidding round.
However, the ministry noted that the revised process was successful in increasing the discovered bid price by Rs 3,917 crore. According to the release, the procedure for the "best-offer round" was managed by the Core Group of Secretaries on Disinvestment (CGD), acting under the authority of the Cabinet Committee on Economic Affairs (CCEA).
The government further explained that the initial bidding round was conducted under the guidelines of the Department of Investment and Public Asset Management (DIPAM), which allows for flexibility in complex strategic transactions to ensure effective implementation.