New Delhi: Finance Minister Nirmala Sitharaman on Friday defended the government's decision to sell a majority stake in IDBI Bank and hit back at Leader of the Opposition Rahul Gandhi, accusing Congress-led governments of using banks and financial institutions as 'personal entities' and pressuring employees to extend loans bypassing prudent lending norms, IANS reported.

Source: IANS

'Congress-era banking had a phonebook for the powerful and a rulebook for the common citizens. The era of connection and setting banking is over,' Sitharaman wrote on X, cited by PTI. She pointed to the 1976 removal of SBI Chairman R. K. Talwar under Indira Gandhi's government and alleged that IDBI was forced to lend to large business groups with close connections to Congress leaders, including Videocon, Winsome, ABG Shipyard and Kingfisher, which turned into bad loans.

Sitharaman said the NDA government revived IDBI Bank through professionalism, prudence and recapitalisation of more than Rs 25,000 crore, that the bank is now poised for its next phase of growth, and that all due process was followed in the strategic restructuring, with a clarification already issued on Thursday.

60.72%Combined government and LIC stake approved for sale in IDBI Bank
Rs 52,878 croreValue of the approved Fairfax transaction
Rs 25,000 crore+Recapitalisation Sitharaman credits the NDA government with
Rs 81 per shareWinning offer — above the Rs 75.99 per share benchmark valuation cited in the government's clarification

Gandhi had criticised the sale in a post on X and in a letter to IDBI Bank employees, saying public banks are not assets to be sold off but tools to build the nation, and declaring, 'I stand with the employees of IDBI Bank.' He questioned why a bank returned to profitability was being sold, pointed to a 2003 assurance to Parliament that the government would retain at least 51 per cent ownership, and raised concerns over employee protections and reservation provisions, according to reporting by Dainik Jagran and PTI.

The Union government on October 14 approved Canada's Fairfax Financial Holdings, through its subsidiary 10955230 Canada Inc., as the strategic buyer for a combined 60.72 per cent stake — the Centre's 30.48 per cent and LIC's 30.24 per cent — for about Rs 52,878 crore, in what would be the largest foreign investment in an Indian bank. After the sale the government will retain 15 per cent and LIC 19 per cent. The transaction is expected to be completed by the end of the current financial year, subject to Reserve Bank of India clearance. In its October 29 clarification, the Finance Ministry said initial bids had fallen below the reserve price of Rs 94.42 per share and that the winning offer of Rs 81 per share exceeded the Rs 75.99 benchmark from two professional valuation agencies.