Congress built banks, BJP is selling them: Rahul Gandhi's attack over IDBI Bank sale
Congress built banks, BJP is selling them: Rahul Gandhi's attack over IDBI Bank sale
M.U.H
30/10/202622
Congress leader and Lok Sabha Leader of Opposition Rahul Gandhi has backed IDBI Bank employees opposing the Centre's proposed sale of its majority stake in the lender to Canada-based Fairfax Financial Holdings, accusing the government of selling a profitable public institution built with taxpayers' money.
In an open letter to the bank's employees, Gandhi questioned the rationale behind privatising IDBI Bank and raised concerns over the impact of the proposed transaction on employees, depositors and reservation policies.
His intervention comes amid fresh questions over the valuation process for the proposed sale, with a Businessworld investigation flagging the timing of a revised valuation exercise and changes in its methodology.
Recalling a meeting with a group of IDBI Bank employees at Parliament House in March last year, Gandhi said they had asked him why the government was selling a bank that its employees had helped make 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 wrote.
Gandhi also referred to a 2003 assurance given by the government to Parliament that it would always retain at least 51 per cent ownership in IDBI Bank.
"An institution built with public money belongs to the public.... In 2003, the government promised Parliament that it would always hold at least fifty-one per cent of IDBI," he said.
He added that although the assurance might not be legally binding, it represented a commitment made to the people of India.
GANDHI WARNS OF IMPACT ON RESERVATION, EMPLOYEES' RIGHTS
The Congress leader argued that the proposed privatisation could affect reservation provisions for Scheduled Castes (SC), Scheduled Tribes (ST) and Other Backward Classes (OBCs).
"When IDBI is privately owned, reservation for SC, ST and OBC candidates will go with it. Your service conditions, already weakened, will lose their last protection," Gandhi wrote.
He said the Congress believed in a strong public sector functioning alongside private enterprises and maintained that public sector banks were institutions for nation-building rather than assets to be sold.
"I stand with you in your fight today, and fully support all your legitimate demands," he added.
Bank employee unions have opposed the Centre's disinvestment plan, raising concerns over the future of employees and the bank's public sector status.
BUSINESSWORLD REPORT FLAGS QUESTIONS OVER FAIRFAX VALUATION
The proposed sale has also come under scrutiny following an investigation by Businessworld into the valuation and bidding process.
According to the report, government officials opened Fairfax Financial's revised bid of Rs 81 per share on July 13, 2026, before ordering fresh valuations that subsequently produced a benchmark price of Rs 75.99 per share.
The investigation flagged changes in the valuation methodology, including the exclusion of private sector banks from the list of comparable institutions. It also questioned the timing of the fresh valuation exercise.
In simple terms, the report raises questions over whether the valuation benchmark was revised after Fairfax's offer was opened, making its Rs 81-per-share bid acceptable against the new benchmark.
The investigation also reported that the government had agreed to indemnify disputed tax liabilities of up to Rs 627 crore as part of the transaction.
However, the Department of Investment and Public Asset Management (DIPAM) has defended the process, saying the valuation methodology was reviewed in April, before the final bids were invited. It maintained that the bidding process remained double-blind.
DIPAM also said the transaction increased the bid value by Rs 3,917 crore.
CENTRE APPROVES SALE OF 60.72% STAKE TO FAIRFAX
On October 14, the Cabinet Committee on Economic Affairs approved the sale of a 60.72 per cent stake in IDBI Bank to Fairfax.
The proposed transaction involves the Centre's 30.48 per cent equity holding and the Life Insurance Corporation of India's (LIC) 30.24 per cent stake in the lender.
IDBI Bank, formerly known as the Industrial Development Bank of India, was established as a development financial institution before transitioning into a commercial bank.
The Congress has also raised concerns over foreign ownership in India's banking sector, citing developments involving Lakshmi Vilas Bank, RBL Bank and Yes Bank since 2020.
DIPAM CLARIFIES SECOND ROUND OF BIDDING
Meanwhile, DIPAM said the second round of bidding for IDBI Bank's strategic disinvestment was conducted under a procedure determined by the Core Group of Secretaries on Disinvestment (CGD).
According to the department, the initial bidding round was conducted during the financial year 2025-26, but the bids received were not approved. Consequently, the first round became functus officio, meaning it ceased to have any further effect.
DIPAM clarified that the reserve price was neither reduced nor increased for the second round, also referred to as the best offer round. The procedure for conducting this round was determined by the CGD.
The proposed sale continues to face opposition from IDBI Bank employees and criticism from the Congress, with Gandhi reiterating his support for the employees as questions over the transaction's valuation process add another dimension to the disinvestment debate.
