Rahul, Nirmala lock horns over IDBI sale; FM says Congress treated banks as 'personal entities'

Finance Minister Nirmala Sitharaman on Friday launched a scathing counterattack against Lok Sabha Leader of the Opposition Rahul Gandhi over the proposed strategic disinvestment of IDBI Bank, declaring that Congress-era banking operations relied on a "phonebook for the powerful". 

Defending the Centre's proposed sale of a controlling stake in IDBI Bank, Sitharaman accused the previous Congress-led governments of political interference and financial mismanagement. 

The political row erupted after Gandhi criticised the Centre's decision to sell a cumulative 60.72% majority stake in IDBI Bank to Canada-based Fairfax Financial Holdings for approximately Rs 53,000 crore. 

Gandhi had accused the administration of parting with a profitable public institution built under past Congress regimes, warning that the move would harm employee job security and dilute caste-based reservation benefits.

In a post on X, Sitharaman alleged that the "IDBI Bank was handed over to us in poor shape". She further said that "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."

Sitharaman asserted that the era of "connection and setting banking" has ended under the current administration.

While citing several instances of administrative pressure- such as the 1957 Mundra scandal and the 1976 removal of then-SBI chairman R.K. Talwar-she argued that public lenders were previously treated as personal entities. 

"Congress-era banking had a phonebook for the powerful and a rulebook for the common citizens," Sitharaman stated. 

The FM also said that under the NDA government, led by Prime Minister Narendra Modi, IDBI Bank was revived through professional management, prudent practices and recapitalisation exceeding Dr 25,000 crore. 

"The IDBI Bank is now poised for its next phase of growth. All due process has been followed in the IDBI Bank strategic restructuring, and we have already clarified this yesterday," she added.

What did Rahul Gandhi say about the IDBI Bank sale? 

The LoP accused the government of dismantling public sector institutions established during the Congress era. 

Taking to X, Rahul said, "During Congress’s time, IDBI was established—to build the nation’s industry. During Modi’s time, first the bidding was seen, then the price was set. During Congress’s time, banks were being created. During Modi’s time, they are being sold." 

In a letter addressed to IDBI Bank employees, the Congress leader also raised concerns over the impact of the proposed privatisation on reservation policies and service conditions.