Daijiworld Media Network - New Delhi
New Delhi, Oct 30: Congress leader and Leader of Opposition in the Lok Sabha Rahul Gandhi on Friday extended support to IDBI Bank employees opposing the proposed disinvestment of the lender, questioning the government's decision to sell a majority stake in the profitable public sector bank to Canada's Fairfax Financial Holdings.
In an open letter addressed to IDBI Bank employees, Gandhi said public sector banks were not assets to be sold but institutions built with public money to serve the nation. He recalled that a group of employees had met him at Parliament House in March last year and questioned why the government was planning to sell a bank they had helped turn profitable.
Gandhi said he had raised the issue in the Lok Sabha, seeking an explanation for the proposed sale and assurances on the protection of employees and depositors, but had received no satisfactory response.
“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, crediting the employees for the bank's recovery.
Pointing out that the government and the Life Insurance Corporation of India (LIC) together currently hold around 95 per cent of IDBI Bank, Gandhi said their combined shareholding would fall to 34 per cent after the proposed transaction. He also referred to an assurance given by the government to Parliament in 2003 that it would retain at least 50 per cent ownership in the bank, saying a commitment made to Parliament was a commitment to the people.
Gandhi warned that privatisation could affect reservation benefits for candidates belonging to Scheduled Castes, Scheduled Tribes and Other Backward Classes, while leaving employees with fewer safeguards over their service conditions.
“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,” he said, assuring employees of his support for their legitimate demands.
In a post on X accompanying the letter, Gandhi accused the Modi government of selling institutions established during the Congress regime. “During Congress's time, banks were being created. During Modi's time, they are being sold,” he said.
His remarks came a day after the Department of Investment and Public Asset Management (DIPAM) defended the procedure followed in the second round of bidding for IDBI Bank's strategic disinvestment. DIPAM said the initial bidding round conducted in the 2025-26 financial year had not secured approval and had consequently ceased to have effect.
The department said the procedure for the subsequent round, referred to as the best offer round, was determined by the Core Group of Secretaries on Disinvestment, which had been authorised by the Cabinet Committee on Economic Affairs. It also rejected concerns over the bank's valuation, stating that the reserve price had neither been reduced nor increased.
According to DIPAM, bidders independently assess the enterprise and submit confidential offers, while independent valuation agencies determine its fair value to help assess the reasonableness of the bids.
On October 14, the government approved the sale of a 60.72 per cent stake in IDBI Bank to Fairfax Financial Holdings for Rs 52,878 crore. The transaction comprises the government's 30.48 per cent holding and LIC's 30.24 per cent stake. Following the sale, the government will retain 15 per cent and LIC 19 per cent in the bank.
The Fairfax-backed entity offered Rs 81 per share, against a benchmark fair value of Rs 75.99 determined by independent valuation agencies. The transaction is subject to regulatory clearances, including approval from the Reserve Bank of India, and is expected to be completed by the end of the current financial year.
The proposed transaction marks a major step in India's long-delayed banking privatisation process.