Reconsider move to privatize IDBI Bank, RS MP Viswam urges Centre; employees hit streets during Bharat Bandh

Despite India’s blue-chip public sector company, Life Insurance Corporation (LIC) having 51 percent shareholding and control over the management of the IDBI Bank, the Modi government has time and again indicated that the bank will be privatized during this year.

Finance Minister Nirmala Sitharaman had categorically said in December 2021 that two more Public Sector Banks (PSBs) would be privatized in Financial Year 21-22, apart from the IDBI Bank.

Thousands of employees associated with the bank hit the streets across the country on Monday in support of the two-day nationwide strike called by trade unions, pointing out that repeated assertions by govt to privatize the 57-year-old bank founded in 1964 have created “apprehensions and fear” among the 40000 employees.

A leader of the bank employees' union said that the employees are worried about their future.

When asked what the employees will do if the government goes ahead with privatization, the IDBI employee said, “We will seek legal remedy”.

“Instead of curing the disease, the government is fighting with the symptoms. Why is the banking sector of the country under stress? Because of big defaulters who fled the country. Instead of catching them, the government is selling out national properties and cleansing the balance sheet of the IDBI,” said the employee.

CPI leader and Rajya Sabha MP Bonoy Viswam echoed the concerns of the IDBI employees in a letter to Finance Minister Nirmala Sitharaman written on March 25.

Asking the Finance Minister to reconsider the decision to privatize IDBI bank, Viswam said that such a decision would violate the assurances given by the NDA government led by the then PM Atal Bihari Vajpayee.

“Government, to ensure its public character, including assurances in 2003 by the then Finance Minister of the NDA Government, said that it would maintain its 51% shareholding. This was incorporated into clause 4 of the Articles of Association of IDBI bank,” said Viswam.

Highlighting that the bank was “characterised as a private bank only for regulatory purposes by the RBI”, the CPI leader wrote, “For the 40,000 employees (direct and indirect) and their families, the decision to privatise will lead not only to certain job losses but also to precarious service conditions as private employers implement their “hire and fire” policies”.

It is worth mentioning that despite being as a "private bank” for regulatory purposes, the IDBI Bank fell under the purview of the Central Vigilance Commission, reservation policies in recruitment and promotion, implementation of the RTI Act, submission of annual returns under the Lokpal and Lokayuktas Act, 2013 amongst other regulatory measures.

With a deposit of over Rs 2,22,578 crore, the bank has a vast network of branches and ATMs all over the country.

As per the latest information, the bank caters to the needs of millions of Indians residing in both urban and rural areas as it has over 3,393 ATMs, 1,886 branches and 1,407 centres across the country.

Viswam, in his letter, also raised the issue of safety of the depositor’s money.

He wrote: “As was experienced post the privatization of the Punjab and Maharashtra Co-operative Bank, Lakshmi Vilas Bank and YES Bank, the safety net provided to customers reduces to a mere Rs 5 lakhs under the Deposit Insurance and Credit Guarantee Corporation Act, causing great loss and difficulty to the customers."

“It is also pertinent to note that the decision to privatise yet another public sector bank will lead to immense difficulties not only for the bank and its employees and customers, but also to the economy of the nation,” he added.

“With outstanding loans of 319 willful defaulters standing at Rs 19,715 crore, the loot of public money has affected the growth of the nation,” he wrote.