Report by Kamgar Ekta Committee (KEC) correspondent
The Reserve Bank of India has given formal approval on fit and proper criteria for the sale of 30.5 per cent shares of the Government of India and 30.2 per cent shares of the Government-owned LIC in IDBI Bank. This will amount to the Government is selling off more than 51 per cent of its shares to complete the privatization of IDBI.
Shri Devidas Tuljapurkar, President IDBI Bank Employees Association, General Secretary of Maharashtra State Bank Employees Federation and Joint Secretary of All India Bank Employees association (AIBEA) said on 20th July 2024 said that this is most unfortunate and ill-advised in terms of both the interests of IDBI’s customers and the interests of the country as a whole.
In his press statement he stated that IDBI was constituted on 1st July 1964 as a subsidiary of Reserve Bank of India. On 16th February, 1976 ownership of IDBI was transferred to the Government of India.
IDBI served the nation as a developmental financial institution for about four decades. With the advent of new economic policy and banking reforms in the name of Narsinham Committee Recommendations, IDBI was transformed into a commercial bank in 2004.
While doing so, it was assured in both Lok Sabha and Rajya Sabha by the then Minister of Finance that in no case governments share will be brought down to the levels of less than 51 per cent, he said.
Notwithstanding the assurance given in the Parliament, during the pandemic, the IDBI Bank by amending its articles of association created an enabling situation whereby Government’s share could be brought down to less than 51%.
Thereafter, without taking the parliament into confidence, the Government transferred 49.2% of its share in favour of LIC. Now the government is trying to sell 30.5% of its own share and 30.2% of LIC’s share to private entities so as to complete the privatization of IDBI, which may fetch around Rs. 29,000 cores.
The Government on the one hand has formed new developmental financial institution named National Bank for Financing Infrastructure and Development & on the other side, contrarily has converted the developmental financial institution, IDBI into a commercial bank which is absurd and now is divesting its share to less than 51%, which is betrayal with the parliament.
The United Forum of IDBI Union’s is approaching the Prime Minister, the Minister of Finance, the President of India, and all parliamentarians with a request to maintain sanctity of the assurance given to the parliament more particularly on the background that now IDBI has booked impressive profit consecutively for three years.
The unions have also appealed to the Government to review its decision in the interest of depositors of IDBI, small borrowers, agricultural borrowers which are likely to be casualty in the eventuality of privatization of IDBI, added Tuljapurkar.