The United Forum of IDBI Officers and Employees has opposed the proposed sale of a majority stake in IDBI Bank to Canada-based Fairfax, seeking an immediate suspension of the process and a comprehensive review under parliamentary scrutiny.
The forum said the proposed transaction was ill-timed and lacked adequate justification and transparency. It argued that volatile market conditions required caution, transparent valuation and wider public deliberation before the sale proceeds.
Speaking to PTI Videos, Surav Kumar, president of the IDBI Bank Officers Association, said there was “no reason for the sale of our bank specially to the foreign player”. The forum’s objection comes after the Union Cabinet approved Fairfax as the strategic buyer for a 60.72% stake in IDBI Bank for Rs 52,878 crore on October 14.
The government has defended the transaction and the valuation process. According to the reported government position, independent professional agencies assessed IDBI Bank using market multiple and asset valuation methods. The Finance Ministry has also argued that the bank’s volatile share price could not be treated as a reliable standalone benchmark for determining the value of the stake.
The proposed sale follows a long financial recovery process at IDBI Bank. In May 2017, the Reserve Bank of India placed the lender under the Prompt Corrective Action framework because of weak capital adequacy, poor asset quality and losses. The bank’s net non-performing assets had exceeded 13% in March 2017.
In early 2019, the Life Insurance Corporation of India acquired a 51% controlling stake in IDBI Bank and became its largest shareholder. The RBI subsequently classified the lender as a private-sector bank for regulatory purposes. The central bank lifted the PCA restrictions in March 2021, subject to conditions and continued monitoring, after the bank’s financial position improved.
The transaction has also triggered a public exchange between Leader of Opposition Rahul Gandhi and Finance Minister Nirmala Sitharaman. Gandhi has supported the bank’s employees and questioned the proposed sale of a lender that has returned to profit. He has also raised concerns about employees’ service conditions, pensions and the possible impact of privatisation on reservation policies.
Sitharaman has defended the government’s handling of IDBI Bank, arguing that politically influenced lending contributed to the lender’s earlier bad-loan problems. She has said the bank was revived through recapitalisation and improved management under the present government.
The employee opposition has moved beyond the demand for a parliamentary review. IDBI Bank unions have called a strike on November 2 and 3 against the government’s decision to sell its stake. The proposed industrial action is expected to become the next major point of mobilisation in the dispute over the bank’s ownership and future management.
The employee forum’s immediate demand is that the sale process be suspended and subjected to wider parliamentary scrutiny before further steps are taken.
