The United Forum of IDBI Officers and Employees on Thursday opposed the proposed sale of a 60.72% stake in IDBI Bank to Canada-based Fairfax Financial Holdings, demanding an immediate suspension of the process and a comprehensive review under parliamentary scrutiny.
Speaking at a national convention on IDBI privatisation, Forum Convener Devidas Tuljapurkar said the deal was ill-timed and inadequately justified. “We are seriously concerned that the transaction may undervalue IDBI’s properties, institutional capabilities, customer relationships, future earnings and strategic importance,” he said.
The Forum called on the government to disclose the valuation methodology, underlying assumptions, treatment of real estate and other assets, and the basis for accepting the sale consideration.
“The public deserves evidence that a national asset is not being transferred at a throwaway price,” Tuljapurkar said. He added that the proposed purchaser’s ownership structure, financial strength, regulatory record and any substantiated controversies in its home jurisdiction must also be subjected to transparent scrutiny.
The Forum regards the decision as a breach of the parliamentary assurance given when IDBI was converted into a banking company. The Government “owes Parliament and the people an explanation of how the present decision honours that commitment,” Tuljapurkar said, referring to the assurance from then Finance Minister Jaswant Singh that the government would retain at least 51% in IDBI.
IDBI Bank has 19,108 employees on its rolls, including 9,500 belonging to SC, ST and OBC categories, 6,911 women employees and 884 differently abled employees. The Forum said reservation, employment security, financial inclusion and development-oriented lending must not be weakened in pursuit of private returns.
On 14 October, the government approved the sale of a 60.72% stake in IDBI Bank to Fairfax, led by Canadian businessman Prem Watsa, for about ₹53,000 crore, or roughly $5.5 billion, in what would be the largest foreign investment in an Indian bank. Fairfax will acquire the Central government’s 30.48% stake, valued at about ₹26,620 crore, and LIC’s 30.24% stake, valued at about ₹26,440 crore, at ₹81 per share. The transaction is expected to be completed by the end of the current financial year, subject to Reserve Bank of India clearance.
The United Forum has also announced a two-day nationwide hunger strike on 2 and 3 November to oppose the sale, with the United Forum of Bank Unions extending support.
