- Government plans to privatise IDBI Bank, selling 60.72% stake in current disinvestment drive
- AIBOC criticised move, citing betrayal of 2003 parliamentary assurance to keep 51% government stake
- IDBI Bank is jointly owned 95% by Government of India and LIC, with LIC holding 49.24% now
All-India Bank Officers' Confederation on Wednesday criticised the government's move to privatise IDBI Bank saying that it would be betrayal of parliamentary assurances given at the time of its transformation in 2003.
In December 2003, the then Finance Minister gave an assurance in Parliament that the government would maintain a shareholding of at least 51% in IDBI Bank at all times.
Privatisation of IDBI Bank is not just the sale of shares, it is the sale of people's savings, the weakening of India's public banking network, and the betrayal of parliamentary assurances given at the time of its transformation, AIBOC said in a statement.
Last week, DIPAM Secretary Arunish Chawla had said IDBI Bank stake sale is expected to complete this fiscal as the qualified bidders have nearly completed their due diligence process.
The Government of India and LIC jointly own 95% of IDBI Bank, of which 60.72% stake is earmarked for the sale under the ongoing disinvestment programme.
'Privatising IDBI Bank is nothing short of privatising people's savings. Nation-building requires strong public banks, not profiteering institutions. Public sector banks exist to serve the people; private banks exist to serve profits,' it said.
AIBOC urged the Government of India to immediately withdraw the proposal to privatise IDBI Bank.
'Instead, the focus must be on strengthening governance and accountability, infusing capital through public financial institutions, accelerating digital modernisation, and expanding IDBI's developmental mandate,' it said.
IDBI Bank became a subsidiary of LIC with effect from January 21, 2019, after the acquisition of an additional 82,75,90,885 equity shares.
On December 19, 2020, IDBI Bank was reclassified as an associate company due to the reduction of LIC shareholding to 49.24%, following the issuance of additional equity shares by the bank under a qualified institutional placement (QIP).
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