On Friday, Finance Minister Nirmala Sitharaman took a dig at Congress chief Rahul Gandhi for his allegations of ‘securing loans by businesses with political linkages which resulted in bad loans’ in IDBI Bank by the successive Congress-led governments.
Following the Government of India’s deal with India’s Canadian firm Fairfax to sell IDBI Bank, the exchange took place after Gandhi’s criticism of this move. The Congress leader had raised doubts about the need for selling off a lender that made money, and the protections given to employees, reservations and the reduced stake of the government post the sale.
Sitharaman Defends Government’s Record
On a recent Twitter post, Sitharaman stated that the IDBI Bank was given to the National Democratic Alliance (NDA) government in a poor state of financial health, having made loans to business entities allegedly associated with Congress leaders.
She referred to the names of Videocon, Winsome, ABG Shipyard and Kingfisher which had turned their loans into bad books for the bank.
Sitharaman argued that the Modi government had tried to build up the soundness of the lender by proper management and lesson-learning with respect to money-lending and also providing adequate financial support.
The government had resuscitated IDBI Bank by providing it with over ₹25,000 crore for strengthening the bank to address its financial challenges, the finance minister said.
Political Debate Over Divestment
However, Gandhi has voiced his discontent with the proposed deal, and supported IDBI Bank staff, stating that he does not understand why this transaction will happen when the lender has become profitable.
The dispute reveals political issues concerning public sector bank privatisation such as the interest of employees, the share-holding pattern of government in banks and the direction of banking institutions.
The proposed sale, though, is an issue that brings tension between the ruling NDA and the Congress-led oppositions, as Sitharaman has pointed out, the government has been successful here so far at reviving IDBI Bank.