FM says Congress, UPA used banks and financial institutions like personal property in IDBI divestment.

New Delhi: In the midst of the controversy over the divestment of IDBI Bank, Finance Minister Nirmala Sitharaman on Friday attacked the Congress party and the former UPA government, accusing them of treating banks and financial institutions like “personal entities” and pressuring bank officials to sanction loans at their convenience, ignoring sound lending practices. In a post on X, Sitharaman also referred to several episodes from the Congress-led era, including the removal of SBI Chairman R K Talwar in 1976 during Indira Gandhi’s tenure. According to her, Talwar was removed after he refused to bow to political pressure to ease lending norms for a company linked to Sanjay Gandhi.

Her remarks came in response to a post on X by senior Congress leader Rahul Gandhi regarding IDBI Bank. Responding to Rahul Gandhi’s comments, Sitharaman said, “IDBI Bank was handed over to us in poor shape, as IDBI itself was forced to lend to large business groups with close connections to @INCIndia leaders such as Videocon, Winsome, ABG Shipyard, and Kingfisher.” “These turned into bad loans, causing huge losses for IDBI Bank, which we recognised,” she added in her social media post. She further said, “The NDA govt led by Hon’ble PM Shri @narendramodi revived the IDBI Bank through professionalism, prudence and recapitalisation of more than Rs 25,000 crores.

The IDBI Bank is now poised for its next phase of growth.” The Finance Minister also said that the entire restructuring process of IDBI Bank had followed due procedure. Rahul Gandhi, meanwhile, voiced support for IDBI Bank employees and questioned the government’s decision to sell the profitable public sector bank to a Canadian firm. The Leader of Opposition in the Lok Sabha said public banks should not be treated as assets to be sold, but as instruments for nation-building.

In a letter to members of the IDBI Bank family, Gandhi said that in March last year a delegation of IDBI Bank employees met him at Parliament House and asked him a straightforward question: why was the government selling a bank that they 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,” Gandhi said. Taking a sharp dig at the Congress leader, Sitharaman said his earlier claims about the Rafale deal had already been disproved and had forced him to apologise.

“Your lies with respect to Rafale had failed and were exposed. You had to apologise. The same will happen here,” she said.

Sitharaman further argued that banking during the Congress years had “a phonebook for the powerful and a rulebook for the common citizens.” “The era of ‘connection and setting banking’ is over. Common people now have easy access to loans, and employees are not under pressure to extend loans over the phone calls,” the Minister said. On October 14, the government approved the sale of a 60.72 per cent stake in IDBI Bank to Canada’s Fairfax Financial Holdings for around Rs 53,000 crore, marking the largest foreign investment in an Indian bank and a significant step in the country’s long-delayed banking privatisation process.

Fairfax will acquire the government’s 30.48 per cent stake, worth about Rs 26,620 crore, along with LIC’s 30.24 per cent holding, valued at around Rs 26,440 crore. The strategic sale of IDBI Bank is expected to be completed by the end of the current financial year, subject to regulatory approval from the Reserve Bank of India.