Congress leader Rahul Gandhi on Friday extended support to IDBI Bank employees opposing its proposed disinvestment, questioning the government's decision to sell a profitable public sector bank to Canada's Fairfax Financial Holdings.
In an open letter to IDBI Bank employees, the Leader of Opposition in the Lok Sabha said public sector banks were not assets to be sold but institutions built with public money to serve the nation.
Gandhi recalled that a group of IDBI Bank employees had met him in Parliament House in March last year, questioning why the government was selling a bank they had helped turn profitable.
He 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 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 employees for the bank's recovery.
Pointing out that the government and the Life Insurance Corporation (LIC) currently own 95 per cent of IDBI Bank, Gandhi said their combined holding would fall to 34 per cent after the proposed transaction.
He also recalled that the government had assured Parliament in 2003 that it would retain at least 50 per cent ownership in the bank, asserting that a commitment made to Parliament was a commitment to the people.
Gandhi warned that privatisation could end reservation benefits for Scheduled Castes, Scheduled Tribes and Other Backward Classes in the bank, 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) clarified the process followed in the second round of bidding for IDBI Bank's strategic disinvestment.
DIPAM said the initial bidding round in the 2025-26 financial year had not secured approval and had consequently ceased to have effect. The procedure for the subsequent round, also called the best offer round, was determined by the Core Group of Secretaries on Disinvestment, which was authorised by the Cabinet Committee on Economic Affairs.
Rejecting concerns over the bank's valuation, DIPAM said the reserve price had neither been reduced nor increased. It added that bidders independently assess the enterprise and submit confidential offers, while independent valuation agencies determine its fair value for comparison.
The clarification followed questions from bank unions and others over the valuation and proposed acquisition by Fairfax.
On October 14, the government approved the sale of a 60.72 per cent stake in IDBI Bank to Fairfax Financial Holdings for around Rs 53,000 crore.
The Canadian firm, led by billionaire Prem Watsa, will acquire the government's 30.48 per cent stake, valued at around Rs 26,620 crore, and LIC's 30.24 per cent holding, worth approximately Rs 26,440 crore.
Fairfax has offered Rs 81 per share, above the benchmark fair value of Rs 75.99 determined by two independent valuation agencies.
The transaction, which would mark a major step in India's long-delayed banking privatisation drive, is expected to be completed by the end of the current financial year, subject to regulatory clearance from the Reserve Bank of India.
(With inputs from PTI)
