Representatives of United Forum of IDBI Officers and Employees have held a series of meetings with several Members of Parliament from political parties across the spectrum, and submitted memoranda urging them to intervene in process of proposed disinvestment of IDBI Bank.

IDBI Bank was operating as Development Financial Institution from 1964 to 2004, and as a universal bank since then, and currently operates with 2,048 branches across the country. The Forum is now seeking appointments with Minister of Finance as well as Prime Minister with a request to stall disinvestment process, its three crore customers and 20,000 employees.

Diverse parties consulted

AV Vithal Koteswara Rao, National General Secretary, All-India IDBI Officers’ Association, said parties consulted so far include the BJP, the Congress, the NCP, the Samajwadi Party, the DMK, the Telugu Desam, the Shiv Sena, the CPI(M), the AAP, the RSP, and the AIADMK. The bank booked profits consistently for last four FYs, i.e., ₹1,359 crore in 2020-21; ₹2,439 crore in 2021-22; ₹3,645 crore in 2022-23; and ₹5,634 crore in 2023-24. It is likely to post a profit of ₹7,000 crore profit during 2024-25. Gross NPAs and net NPAs are at historical lows of 3.68 per cent and 0.20 per cent respectively, and provision coverage ratio at 99.42 per cent. 

Prime real estate

Thus, there is no reason why this profit-making entity should be sold to private entities, least of all Emirates NBD from Dubai and Fairfax Financial Holdings with roots in Canada, which are learnt to be main bidders. The proposal is absurd especially at a time when the BJP-led NDA government, which has always argued the Swadeshi cause and self-reliance, is in power. 

Unions suspect bidders are not driven as much to serving the customers’ cause as laying claim to prime real estate owned by IDBI Bank, including the 50 acre-property in Hyderabad. While the Centre is anxious to achieve an early closure of the deal, bidders appear to be driving a hard bargain to obtain concessions and relaxations from it as well as regulators.

Recalls Centre’s promise

Unions sought to draw attention of people’s representatives to assurance given in 2003 by late Jaswant Singh, then finance minister, that Centre will not disinvest more than 51 per cent of its stake at any time and shall retain ownership of the bank. As on date, it owns 45.48 per cent and the LIC, 49.24 per cent. Department of Investment and Public Asset Management of the Ministry of Finance is now in the process of selling 30.48 per cent of its share and 30.24 per cent of LIC’s share. 

Social goals at stake

Assuming this works out, there is reason to believe new entity will focus only on boosting profits and pay scant attention to social commitments. The bank currently caters to not just two crore depositors including 18.72 lakh Jan Dhan account holders but also pursues social priorities, earning significant profits along with achieving social gains. Common man’s priorities such as agriculture, small business, and trade will become a casualty if the proposed deal was allowed to fructify.

Judging from track record of potential bidders, unions also apprehend they are more than likely to exit ownership at the earliest provocation by disposing of precious properties owned by bank. This will betray the trust of the depositors painstakingly earned by bank’s employees through hard work, Koteswara Rao said.