The United Forum of IDBI Officers and Employees has formally opposed the proposed sale of a majority stake in IDBI Bank to Canada-based Fairfax Financial Holdings. During a national convention held recently, the union demanded an immediate suspension of the divestment process, calling instead for a comprehensive review of the transaction under parliamentary scrutiny.
The controversy stems from the government’s decision to divest a 60.72 percent stake in the bank, a move that would represent the largest foreign investment in an Indian lender to date. The proposed deal, which has been under discussion as part of the country’s wider banking privatisation drive, involves the government and the Life Insurance Corporation (LIC) selling shares valued at approximately Rs 53,000 crore, or USD 5.5 billion.
Devidas Tuljapurkar, the convener of the United Forum of IDBI Officers and Employees, expressed grave concerns regarding the transparency of the deal. He argued that the current economic climate is volatile, necessitating greater caution and public deliberation before proceeding. According to the union, there is a risk that the bank’s institutional capabilities, customer relationships, future earnings, and real estate assets may be significantly undervalued in the final agreement.
The union has demanded that the government disclose the full methodology used to reach the valuation. Specifically, they are seeking clarity on the assumptions made regarding asset treatment and the rationale behind the sale consideration. The employees maintain that the public deserves evidence that national assets are not being transferred at a price that fails to reflect their true long-term strategic worth.
Beyond valuation concerns, the union raised questions regarding the prospective buyer. Tuljapurkar stated that the ownership structure, financial strength, and regulatory track record of Fairfax—led by Canadian billionaire Prem Watsa—should be subjected to transparent public scrutiny. He emphasized that regulatory approval alone cannot serve as a substitute for the public accountability required when transferring control of a major Indian financial institution.
The opposition also touches upon the social implications of the privatisation. The union highlighted that the current workforce includes over 19,000 employees, including nearly 9,500 staff members from SC, ST, and OBC categories, as well as 6,911 women and 884 differently-abled personnel. There are fears that the shift to private ownership could weaken employment security, financial inclusion efforts, and the bank’s development-oriented lending mandates.
Furthermore, the Forum claims the decision contradicts past parliamentary assurances. They pointed to statements made by former Finance Minister Jaswant Singh, who had previously indicated that the government’s shareholding would remain at no less than 51 percent. The union has called upon the government to explain how the current move aligns with those prior commitments to Parliament and the public.
Under the terms approved on October 14, Fairfax is set to purchase shares at Rs 81 per share, a price higher than the Rs 75.99 benchmark determined by independent valuation agencies. The transaction, involving a 30.48 percent stake from the government and 30.24 percent from LIC, is expected to conclude by the end of the current financial year, provided it receives the necessary clearances from the Reserve Bank of India.
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