Opposition slams LIC plan to bail out IDBI Bank

The Congress and the Left criticised the government's move to buy stake in the IDBI Bank asking why was a government insurer bailing out a defaulter bank at a cost of Rs 13,000 crore.

Published: 01st July 2018 05:01 AM  |   Last Updated: 01st July 2018 05:02 AM   |  A+A-

An exterior view of Life Insurance Corporation of India's (LIC) headquarters is seen in Mumbai | Reuters

Insurance regulator okays Life-line for sick IDBI Bank | Reuters

By Express News Service

NEW DELHI: The Congress and the Left criticised the government's move to buy stake in the IDBI Bank asking why was a government insurer bailing out a defaulter bank at a cost of Rs 13,000 crore.

The opposition attack came after reports that Insurance Regulatory and Development Authority of India (IRDAI) board approved Life Insurance Corporation's investment in IDBI Bank, allowing LIC to own up to 51 percent in the beleaguered lender.

"As per law LIC canot invest more than 15 percent in IDBI," Congress spokesperson Priyanka Chaturvedi said.

"As the majority owner of the bank, LIC will have to keep infusing capital into the bank, to keep it going, in the years to come. And this is where common people (38 Cr LIC policy holders) shall feel the burden," party media panelist Gourav Vallabh said.

The Congress leaders said IDBI Bank is the worst performing public sector bank whose fourth quarter losses have swollen to Rs 5,663 Crore, gross NPA's to a whopping Rs 55,588.26 Cr and it had bad loans ratio of close to 28 percent.

CPI-M leader Sitaram Yechury urged the government to stop this loot. "LIC is the repository of people's savings in the form of insurance policies.

Using this capital to bailout the worst defaulter bank is tantamount to public loot of people's savings," Yechury said, adding that "LIC is not supposed to be in banking. It is being forced by suddenly changing rules. Regulatory mechanism being destroyed by Modi government so that defaulters don't have to repay. What is going on."

Both the Congress and the CPI-M accused the government of being pro-rich. "Bailing out rich defaulters, by diverting peoples' money. LIC is public money. Why no recovery of loans from rich defaulters? Cronyism of the worst kind by this Modi govt. Rich can loot and scoot, the common Indian will pay back their loans," said Yechury.

"Squeezing the hard earned savings of the common people is the sole motto of the Modi government," Chaturvedi added.

Stay up to date on all the latest Nation news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)

Comments(1)

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

  • P K Chaudhuri

    Political parties in opposition have been silent against huge amounts of NPAs and equally huge amounts of write-offs every year by Public Sector Bank. In fact the previous government deliberately spoiled the work culture of PSBs. Taking over of IDBI Bank by LIC is a very good and economically prudent decision for the nation. It is for sure that all round development will happen now in IDBI Bank. The new management of IDBI bank must resuffle the officers after bringing in some modern management concepts. The services of external expert groups may be availed for services such as Due Diligence
    4 months ago reply
facebook twitter whatsapp