Finance Minister Nirmala Sitharaman has responded strongly to Congress leader Rahul Gandhi’s criticism of the proposed IDBI Bank disinvestment, accusing previous Congress governments of using public sector banks for political purposes. The exchange has intensified the political debate over the government’s plan to sell a majority stake in the public sector lender.
Rahul Gandhi Opposes IDBI Bank Disinvestment
Rahul Gandhi recently extended support to IDBI Bank employees opposing the proposed stake sale. In an open letter, the Leader of Opposition argued that public sector banks were established using public money and should serve the country’s development rather than be treated as assets for sale.
He also questioned the government’s decision to reduce its ownership in the bank and raised concerns about the future of employees, depositors and reservation-related protections following privatisation.
Sitharaman Accuses Congress of Banking Interference
Responding to Gandhi’s criticism, Sitharaman alleged that Congress-led governments had treated banks and financial institutions as personal entities. In a post on X, she cited historical instances in which, according to her, political leaders influenced lending decisions and pressured banking officials to relax established rules.
She also referred to the removal of former State Bank of India chairman R.K. Talwar in 1976, alleging that the decision followed his refusal to relax lending conditions for a company linked to Sanjay Gandhi’s circle.
Bad Loans and IDBI’s Financial Condition
The Finance Minister claimed that IDBI Bank had faced substantial financial difficulties because of loans extended to major business groups, including Videocon, Winsome, ABG Shipyard and Kingfisher.
According to Sitharaman, several of these loans became non-performing assets and contributed to losses at the bank. She credited the NDA government with supporting its recovery through recapitalisation of more than Rs 25,000 crore and changes in management and lending practices.
These claims formed the central part of her response to Rahul Gandhi’s objections.
Government Defends the Proposed Stake Sale
The Centre has defended the disinvestment process, maintaining that the required procedures were followed. On October 14, the government approved the proposed sale of a combined 60.72 per cent stake in IDBI Bank to Canada’s Fairfax Financial Holdings for approximately Rs 53,000 crore.
The proposed transaction involves the government’s 30.48 per cent holding and LIC’s 30.24 per cent stake. Its completion remains subject to the necessary regulatory approvals, including clearance from the Reserve Bank of India.
Rahul Gandhi Raises Concerns Over Employees and Public Ownership
Gandhi has argued that the proposed sale could affect employees’ service conditions and the bank’s public-sector character. He also questioned the government’s earlier assurance about retaining a minimum level of public ownership.
The IDBI Bank employees’ association has welcomed Gandhi’s support and expressed concerns about the institution’s future, calling for transparency and protection of public interest.
IDBI Bank Sale Becomes a Fresh Political Flashpoint
The exchange between Sitharaman and Gandhi has brought the proposed IDBI Bank transaction into the centre of a wider political debate over public sector institutions, banking reforms and government disinvestment.
While the Finance Minister has defended the sale as part of the bank’s next phase of growth, Congress has questioned whether transferring majority ownership serves the interests of employees and the public. The final outcome will depend on regulatory clearances and the completion of the transaction.
