Politics

Congress Questions Transparency in IDBI Bank Sale to Fairfax

By PTI

On Saturday, October 31, 2026, Congress general secretary in charge of communications, Jairam Ramesh, asked the government why concerns about transparency and conflicts of interest arise with every major deal under the Modi administration. Ramesh highlighted that IDBI Bank, founded on July 1, 1964, was envisioned by former finance minister T. T. Krishnamachari and has historically supported private sector growth and the creation of key institutions such as SIDBI, EXIM Bank, the NSE, SEBI and NSDL. He noted that the bank posted a profit of nearly ₹10,000 crore in the last financial year.

The government approved the sale of a 60.72% stake in IDBI to Canada’s Fairfax Financial Holdings for about ₹53,000 crore (US$5.5 billion) on October 14. The transaction is the largest foreign investment in an Indian bank and a milestone in the country’s long‑delayed banking privatisation drive.

Ramesh cited a Businessworld investigation that revealed potential conflicts of interest. He pointed out that Gurumoorthy Mahalingam, an independent director at LIC, served on the boards of both LIC and Thomas Cook India (controlled by Fairfax) for seven months while LIC was selling its 30.24% stake in IDBI and Fairfax was a bidder. Mahalingam was also a member of LIC’s Investment Committee, raising a “clear case of a potential, serious conflict of interest.” Ramesh said the government’s explanation was vague and did not address the conflict, the future of IDBI employees, or the urgency of selling a profitable public sector bank.

He questioned why the minimum price for IDBI shares, initially set at ₹94.42, was later lowered to ₹75.99, resulting in a sale price about ₹8,800 crore below the minimum. Ramesh asked who decided the new price, under what rules, and whether those who set it knew Fairfax’s bid value.

Ramesh also asked why ten former government and regulatory officials were appointed to companies within the Fairfax group after the IDBI sale process began, and whether those appointments had been investigated.

On Friday, October 30, Leader of the Opposition Rahul Gandhi questioned the sale, prompting Finance Minister Nirmala Sitharaman to accuse him of spreading lies and to assert that all due process had been followed. Sitharaman said the bank had been handed to the government in poor shape, with bad loans from large business groups linked to INC leaders, and that the NDA government had revived IDBI through professionalism, prudence and a recapitalisation of more than ₹25,000 crore.

The IDBI transaction is expected to be completed by the end of the current financial year, subject to regulatory clearance from the Reserve Bank of India.