Congress leader and Leader of Opposition Rahul Gandhi has extended his support to IDBI Bank employees opposing the Centre’s proposed disinvestment. The government plans to sell a majority stake in the public sector bank to Canada’s Fairfax Financial Holdings. Gandhi questioned the decision to privatise a profitable institution built with taxpayers’ money. He also raised concerns about transparency, employee protection and public interest. Meanwhile, bank employees have demanded an immediate review of the proposed deal.
Rahul Gandhi Questions Government’s Decision to Privatise IDBI Bank
Rahul Gandhi expressed solidarity with IDBI Bank employees who are protesting against the proposed sale. He questioned why the government wants to privatise a bank that has returned to profitability after facing financial difficulties. In a post on X, Gandhi said Congress established IDBI to support the country’s industrial development. He alleged that the present government was focused on selling public sector institutions. He also shared an open letter recalling his meeting with bank employees in Parliament House in March last year.
In his letter, Gandhi highlighted IDBI Bank’s financial turnaround and praised employees for their contribution. He stated that the bank earned more than Rs 9,000 crore in profit last year after facing losses seven years ago. He also questioned how the government would protect employees and depositors after the sale. Gandhi warned that privatisation could affect reservation benefits for Scheduled Castes, Scheduled Tribes and Other Backward Classes. He reiterated that public sector banks play an important role in nation-building and assured employees of his support.
The Centre approved the sale of a 60.72 per cent stake in IDBI Bank to Canada-based Fairfax Financial Holdings on October 14. The proposed transaction is valued at approximately Rs 52,878 crore. Under the deal, Fairfax will acquire the government’s 30.48 per cent stake and LIC’s 30.24 per cent holding. The company has offered Rs 81 per share, compared with the benchmark fair value of Rs 75.99 per share. The transaction still requires regulatory approval from the Reserve Bank of India (RBI).
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Questions Raised Over IDBI Bank’s Valuation Process
The proposed deal has faced questions following a Businessworld investigation into the valuation and bidding process. The report raised concerns about changes in the valuation methodology and the exclusion of certain private sector banks from the comparison. It also questioned whether officials revised the benchmark valuation after opening Fairfax’s bid. Another concern involves a reported government agreement to cover certain disputed tax liabilities of up to Rs 627 crore. However, the Department of Investment and Public Asset Management (DIPAM) has defended the process and rejected allegations of irregularities.
The United Forum of IDBI Officers and Employees has opposed the proposed sale of the bank’s majority stake to Fairfax Financial Holdings. The organisation has demanded an immediate suspension of the disinvestment process. It has also called for a comprehensive review of the transaction through parliamentary scrutiny. Meanwhile, DIPAM maintains that the valuation process was reviewed before inviting final bids. The department has also stated that the bidding process remained double-blind and that the transaction increased the bid value by Rs 3,917 crore.