IDBI Bank sale: Rahul Gandhi backs employees against privatisation, raises concerns over reservation and job security
The Leader of Opposition in the Lok Sabha, Rahul Gandhi, has backed IDBI Bank employees opposing the lender's proposed privatisation, warning that the sale could jeopardise reservation protections for Scheduled Castes (SC), Scheduled Tribes (ST) and Other Backward Classes (OBC).
In a letter addressed to IDBI Bank employees on Thursday (October 29), Rahul Gandhi questioned the government's decision to sell its controlling stake in the bank despite its financial turnaround. He also raised concerns over employees' service conditions and recalled a parliamentary assurance made in 2003 that the government would retain at least 51% ownership in the lender.
"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 said in the letter.
His remarks come as the United Forum of IDBI Officers and Employees has demanded an immediate suspension of the proposed transaction and a comprehensive review under parliamentary scrutiny.
Gandhi credited IDBI Bank employees with playing a key role in the lender's financial recovery, arguing that the proposed sale raised questions about the government's decision to transfer control of the institution.
He pointed out that the bank had been making losses seven years ago but earned a profit of more than ₹9,000 crore last year.
The Congress leader also questioned the government's position in light of the assurance given to Parliament in 2003, when the then Finance Minister, Jaswant Singh, said the government's shareholding in IDBI would remain at a minimum of 51%.
Under the proposed transaction, the government's stake and that of Life Insurance Corporation of India (LIC) will be significantly reduced, transferring majority control to a private buyer.
The United Forum of IDBI Officers and Employees has opposed the proposed sale of a majority stake to Canada's Fairfax Financial Holdings, calling for the process to be suspended and reviewed transparently.
At a national convention on IDBI Bank privatisation, Forum convener Devidas Tuljapurkar said the decision was ill-timed and inadequately justified, particularly amid volatile market conditions.
The Forum has expressed concern that the transaction could undervalue the bank's properties, institutional capabilities, customer relationships, future earnings and strategic importance.
Tuljapurkar demanded disclosure of the valuation methodology, underlying assumptions, treatment of real estate and other assets, and the basis on which the government accepted the sale consideration.
He also called for transparent scrutiny of the proposed purchaser's ownership structure, financial strength and regulatory record.
"Regulatory approval cannot substitute for public accountability over the transfer of control of a major Indian bank," was the central concern raised by the Forum.
The employee body also argued that the government owed Parliament and the public an explanation of how the proposed transaction aligned with the assurance given when IDBI was converted into a banking company.
The proposed sale has also prompted concerns about the future of reservation policies, employment conditions and the bank's broader social responsibilities.
Tuljapurkar said the transaction raised fundamental questions about the social role of banking, including opportunities for historically disadvantaged communities, financial inclusion and development-oriented lending.
IDBI Bank has 19,108 employees, including 9,500 from SC, ST and OBC communities. The bank also has 6,911 women employees and 884 employees with disabilities.
Employee representatives have argued that these groups' interests, along with job security and existing service conditions, reservation, and opportunities for historically disadvantaged communities should be considered before control of the bank is transferred to a private owner.
The concerns raised by Gandhi and the Forum centre on the potential implications of privatisation. The final impact on reservation and employment arrangements will depend on the applicable legal and regulatory framework and the terms governing the transition.
The Union Cabinet approved the proposed sale of a 60.72% controlling stake in IDBI Bank on October 14, in a transaction valued at ₹52,878 crore, or around $5.56 billion.
The buyer is a subsidiary of Canada's Fairfax Financial Holdings, led by billionaire Prem Watsa. The deal involves the sale of stakes held by both the central government and LIC.
The government will sell its 30.48% stake, valued at approximately ₹26,620 crore, while LIC will divest its 30.24% holding, valued at around ₹26,440 crore.
(With ANI, PTI inputs)
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