‘IDBI Bank was handed over to us in poor shape’: Sitharaman hits back at Rahul Gandhi amid sale row

Finance Minister Nirmala Sitharaman on Friday said IDBI Bank was handed over to the NDA government in poor shape, arguing that it had been revived through professional management, prudent lending and recapitalisation of more than Rs 25,000 crore.

Her remarks came in response to Congress leader Rahul Gandhi's criticism of the government's decision to sell a majority stake in the public sector lender to Canada’s Fairfax Financial Holdings.

Also Read: IDBI Bank sale row: Finance Ministry defends valuation process, says reserve price was not changed


In a post on X, Sitharaman said IDBI Bank had been forced to lend to large business groups, including Videocon, Winsome, ABG Shipyard and Kingfisher, which subsequently turned into bad loans and caused substantial losses.

She said the bank was now poised for its next phase of growth and that all due process had been followed in its strategic restructuring.

The exchange came a day after the finance ministry issued a clarification defending the valuation and bidding process for the sale, saying the reserve price had neither been increased nor reduced and that the initial bidding round had been closed after offers fell short of the reserve price.

Gandhi, in a letter to IDBI Bank employees dated October 29, questioned why the government was selling a lender that had returned to profitability. He said the bank had reported a profit of more than Rs 9,000 crore last year, crediting employees for the turnaround.

Also Read: IDBI Bank employees' forum opposes majority stake sale to Fairfax, seeks parliamentary review

He also raised concerns over the impact of privatisation on employees' service conditions and reservations for SC, ST and OBC candidates, and said the government and LIC’s combined ownership would fall from 95% to 34% after the sale.

The government earlier approved Fairfax as the strategic buyer for a 60.72% stake in IDBI Bank, comprising 30.48% held by the Centre and 30.24% by LIC. The transaction is valued at Rs 52,878 crore.