IDBI Bank sale row: Rahul Gandhi writes to staff, Sitharaman hits back over Rs 53,000 crore Fairfax deal

On Thursday 29 October the Department of Investment and Public Asset Management said that the second round of bidding followed the procedure set by the Core Group of Secretaries on Disinvestment. It added that the bids in the first round, held in 2025-26, had not been approved, so that round ceased to have effect. The department issued the clarification after questions, including from a bank union, about the bank's valuation and the bid price.

What Rahul Gandhi says

In an open letter dated 29 October, Gandhi said employees had asked him in March last year why a profitable bank was being sold, and that he had raised the question in the Lok Sabha without receiving a reason from the government. He said that the bank was losing money seven years ago and earned more than Rs 9,000 crore in profit last year. He added that the government had promised Parliament in 2003 that it would always hold at least 50% of IDBI, a promise that is not written into law.

He also raised the issue of jobs. Under private ownership, he said, reservation for Scheduled Castes, Scheduled Tribes and Other Backward Classes would go, and the weakened service conditions of employees would lose their last protection. He said he fully supported the employees' legitimate demands. On Friday he wrote on X that banks were being created during the Congress's time and are being sold during Modi's time. Another report quotes him as saying that under the present government the bidding came first and the price was set afterwards.

What Sitharaman says

Sitharaman replied on 30 October. She said that Congress governments had treated banks and financial institutions as personal entities and pressured staff to lend outside prudent norms, summing up that banking in that era had a phonebook for the powerful and a rulebook for the common citizen. She listed examples:

• In 1957, Haridas Mundra obtained funds from the Life Insurance Corporation through the influence of Congress leaders.
• In 1976, the government of Indira Gandhi removed the State Bank of India chairman, R.K. Talwar, after he refused to relax lending to a company linked to Sanjay Gandhi's circle.
• Sanjay Gandhi pressured the Central Bank of India over loans to Maruti.
• B. Janardhana Poojary, a minister of state for finance, pressured bank staff in the 1980s.
• Pawan Kumar Bansal, as a minister in the UPA government, is alleged to have pressured Canara Bank over loans to family-linked businesses.

On IDBI itself she said the bank was handed over in poor shape after being forced to lend to groups such as Videocon, Winsome, ABG Shipyard and Kingfisher, whose loans turned bad. She said the present government revived the bank through professional management and a recapitalisation of more than Rs 25,000 crore, and that all due process had been followed. She referred to the White Paper on the Indian Economy released in February 2024, and said that the Congress's claims on Rafale had failed, adding that the same would happen here.

The reports describe three concerns among employees: why a profitable public bank is being sold, how employees and depositors will be protected, and what happens to reservation and service conditions after privatisation. A bank union has questioned the valuation and the bid price, according to the report of the department's clarification. The reports found do not carry a statement from a union beyond that.

The sale cannot close until the Reserve Bank of India gives its clearance, and the government expects to complete it by the end of the financial year. Until then, the argument is likely to continue in Parliament and in public, and the two sides have so far spoken about the past rather than about the terms of the deal. The valuation, the price and the protections for staff are the points on which a bank union and the Congress have asked questions.