Sitharaman says NDA revived IDBI Bank after UPA-era bad loan crisis
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In response to Rahul Gandhi's opposition to IDBI Bank's privatisation, Nirmala Sitharaman stressed the successful recovery of the bank thanks to the NDA government's strategies. She pointed to the previous UPA government's fiscal mismanagement, which caused notable losses. Sitharaman also discussed the reviewed valuation process for the stake sale, criticising Gandhi for his attempts to politicize banking matters and the undue stress placed on bank staff during earlier administrations.
New Delhi: Finance Minister Nirmala Sitharaman Friday countered Rahul Gandhi's opposition to the privatisation of IDBI Bank, saying the NDA government turned around a lender that had sunk into a bad-loan sinkhole due to questionable underwriting during the erstwhile UPA regime."IDBI Bank was handed over to us in poor shape, as IDBI itself was forced to lend to large business groups with close connections to @INCIndia leaders such as Videocon, Winsome, ABG Shipyard, Kingfisher, etc. These turned into bad loans, causing huge losses for IDBI Bank, which we recognised," the finance minister wrote on social media platform X (formerly, Twitter).
Her response came after Gandhi, leader of the Opposition in the Lok Sabha, said in a post on X that he stood with the employees of IDBI Bank against the stake sale and that during the strategic sale process, first the bids were seen and then the price was set. Canadian investor Fairfax is set to take over IDBI Bank in the biggest cross-border M&A to date in Indian banking.
In her response, Sitharaman noted that the NDA govt led by Prime Minister Narendra Modi revived the IDBI Bank through professionalism, prudence and recapitalisation of more than ₹25,000 crore. "The IDBI Bank is now poised for its next phase of growth," she said, noting that all due process has been followed in the IDBI Bank strategic restructuring. The finance minister in her response stated that during Congress-era, banking had become 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," she said. The finance minister in her response noted that, "@INCIndia has used banks and financial institutions as personal entities and pressured bank employees to extend loans at their whim, bypassing prudent lending norms."
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She also listed past instances, including that of Pawan Kumar Bansal, as a minister in the UPA, pressured Canara Bank to give loans to his family-linked businesses. "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," she said.
On Thursday, the finance ministry said the entire valuation methodology used in the stake sale of IDBI Bank was reviewed by the core group of secretaries on disinvestment (CGD). In a 'Clarification on the Process of Strategic Restructuring of IDBI' issued on Thursday, the ministry said in due exercise of these powers, the CGD itself determined the procedure for the second or the best offer round.
Earlier this week, Sitharaman criticised Gandhi over his comments on the Tata Group, accusing him of politicising commercial and legal matters. "Casually labelling commercial and legal matters as criminal is unacceptable," Sitharaman said on X.
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