FM Sitharaman slams Rahul Gandhi over remarks on IDBI Bank stake sale
New Delhi: Finance Minister Nirmala Sitharaman on Friday defended the government’s decision to divest a majority stake in public sector IDBI Bank, while accusing the erstwhile Congress-led governments of political interference that led to huge non-performing assets in public sector banks.
Reacting to the Leader of the Opposition Rahul Gandhi’s criticism over the proposed IDBI Bank stake sale, the Finance Minister said, “We all know how the Congress has used Banks and financial institutions as personal entities and pressured bank employees to extend loans at their whim, bypassing prudent lending norms.”
“In 1976, Indira Gandhi’s government removed SBI Chairman R.K. Talwar after he refused political pressure to relax lending conditions for a company linked to Sanjay Gandhi’s circle. Sanjay Gandhi pressured the Central Bank of India over loans to Maruti,” FM Sitharaman wrote on X.
“The IDBI Bank was handed over to us in poor shape, as IDBI itself was forced to lend to large business groups such as Videocon, Winsome, ABG Shipyard and Kingfisher etc with close connections to Congress leaders. These turned into bad loans, causing huge losses for IDBI Bank, which we recognised,” the finance minister stated.
The NDA government led by Prime Minister Narendra Modi 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.
“All due process has been followed in the IDBI Bank strategic restructuring, and we have already clarified this yesterday,” FM Sitharaman added.
In a post on X, FM Sitharaman cited several controversies in the banking sector across successive Congress governments, alleging that political leaders had influenced lending decisions and pressured public sector bank employees to extend loans without following established norms.
“Congress-era banking 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 Finance Minister wrote.
“Many more instances of blatant scams and economic mismanagement have been covered in the White Paper on the Indian Economy released in February 2024. It remains relevant even now,” the Finance Minister added.
On October 14, the Centre approved the sale of a 60.72 per cent stake in IDBI Bank to Canada’s Fairfax Financial Holdings for about Rs 53,000 crore. This would be the largest foreign investment in an Indian bank.
Rahul Gandhi had criticised the Centre over the decision to sell a majority stake in IDBI Bank. He said that while Congress governments set up banks, the Narendra Modi-led dispensation was selling them.
“I stand with the employees of IDBI Bank,” he said on X, expressing solidarity with the bank’s employees.
