New Delhi, Oct. 30 -- The proposed disinvestment of IDBI Bank triggered a political face-off on Friday, with Congress leader Rahul Gandhi backing the bank's employees and questioning the government's decision to sell the profitable public sector lender to Canadian firm Fairfax, while Finance Minister Nirmala Sitharaman accused the Congress of treating banks as personal entities and pressuring them to extend loans.
In an open letter addressed to IDBI Bank employees on Thursday, Gandhi said a group of bank employees had met him in Parliament House in March last year and questioned why the government was selling an institution they had helped turn 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," he said.
Gandhi credited the employees with turning around the bank's financial performance, pointing out that IDBI was making losses seven years ago but earned profits of over Rs 9,000 crore last year.
He argued that an institution built with public money belonged to the people and pointed out that the government and LIC currently own 95 per cent of the bank, a stake that would fall to 34 per cent after the proposed sale.
Recalling a commitment made by the government in Parliament in 2003 to retain at least 50 per cent ownership in IDBI, Gandhi said a promise made to Parliament was a promise made to the people. He also warned that privatisation would end reservation benefits.
Responding to his remarks, Sitharaman alleged that the Congress-led government had used banks and financial institutions as personal entities and pressured employees to sanction loans by bypassing prudent lending practices.
She cited the removal of SBI chairman R K Talwar in 1976 during Indira Gandhi's tenure, alleging that he was removed after resisting political pressure to relax lending norms for a company linked to Sanjay Gandhi. The Finance Minister also accused the previous government of forcing IDBI to lend to business groups, including Videocon, Winsome, ABG Shipyard and Kingfisher, resulting in bad loans and substantial losses.
Sitharaman said the NDA government had revived the bank through professional management, prudent practices and recapitalisation of more than Rs 25,000 crore. She asserted that all due procedures had been followed in the proposed strategic restructuring.
Published by HT Digital Content Services with permission from Millennium Post.