Politics
Rahul Gandhi Urges Protection of IDBI Bank Employees Amid Sale to Fairfax
By PTI
Congress leader Rahul Gandhi has voiced support for IDBI Bank employees and questioned the government’s decision to sell the profitable public bank to Canadian firm Fairfax. In a letter to the bank’s staff, Gandhi recalled a meeting in Parliament House in March last year where employees asked why a profitable bank was being sold. He said the government gave no explanation and that the sale to Fairfax had been decided.
Gandhi highlighted IDBI’s transformation from a development bank to a commercial bank, noting that the institution was losing money seven years ago but earned a profit of over ₹9,000 crore last year. He emphasized that public banks belong to the public, pointing out that the government and LIC currently own 95% of IDBI, which would drop to 34% after the sale.
He cited a 2003 promise that the government would hold at least 50% of IDBI, arguing that such a promise to Parliament is a promise to the people. Gandhi warned that privatization could affect reservations for SC, ST and OBC candidates and weaken employee service conditions.
The remarks followed a statement from the Department of Investment and Public Asset Management (DIPAM) that the second round of bidding for IDBI’s strategic disinvestment was conducted under a procedure set by the Core Group of Secretaries on Disinvestment, empowered by the Cabinet Committee on Economic Affairs. The first round of bidding in FY 2025‑26 was not approved and became functus officio.
DIPAM clarified that there is no pre‑determined benchmark for bids; independent valuation agencies assess the bank’s fair value to compare with confidential offers. The Request for Proposal allows for a situation where the highest bid is lower than the reserve price, after which the government decides the next steps.
On October 14, the government approved the sale of a 60.72% stake in IDBI to Fairfax Financial Holdings for about ₹53,000 crore ($5.5 billion). Fairfax will acquire the government’s 30.48% stake (₹26,620 crore) and LIC’s 30.24% stake (₹26,440 crore) at ₹81 per share, above the benchmark fair value of ₹75.99 per share set by two independent valuation agencies. The transaction is expected to complete by the end of the current financial year, pending regulatory clearance from the Reserve Bank of India.
Frequently asked questions
What did Rahul Gandhi say about the sale of IDBI Bank?
Rahul Gandhi urged protection of IDBI Bank employees and questioned the government’s decision to sell the profitable bank to Fairfax, recalling a meeting where staff asked why a profitable bank was being sold and noting the government gave no explanation.
What are the details of the IDBI stake sale to Fairfax?
The government approved the sale of a 60.72% stake in IDBI to Fairfax Financial Holdings for about ₹53,000 crore ($5.5 billion). Fairfax will acquire the government’s 30.48% stake (₹26,620 crore) and LIC’s 30.24% stake (₹26,440 crore) at ₹81 per share, above the benchmark fair value of ₹75.99 per share set by two independent valuation agencies. The transaction is expected to complete by the end of the current financial year, pending regulatory clearance from the Reserve Bank of India.