‘Condemnable’. IDBI Bank sale move against solemn assurance to Parliament, says Officers’ Association

The All India IDBI Officers’ Association has reiterated the move to sell IDBI Bank to private players is against the solemn assurance given by the then Finance Minister to Parliament in December 2003, that the government of India would maintain a shareholding of not less than 51 per cent in the bank at all times, says Vithal Koteswara Rao AV, General Secretary of the Association.

The United Forum of IDBI Officers and Employees has launched a social media campaign (#TogetherForIDBI) to create awareness among bank customers as well as the common man on the implications of the sale of the bank to private/foreign players by promoters, the government of India and the LIC of India.

The proposed sale by the Centre and the LIC with a shareholding of respectively 45.48 per cent and 49.24 per cent is condemnable, Rao said.

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Vithal Koteswara Rao AV, General Secretary, All India IDBI Officers’ Association

Hire-and-fire policy

The sale will bring a hire-and-fire policy to come into play, particularly on women employees and employees with disabilities (physical/visual), Rao said.

The bank has on its rolls at least 5,250 permanent women employees and 430 permanent employees with disabilities. Fate of 17,000 families supported by permanent employment and around 20,000 by indirect employment too will be at risk, he added.

As per responses to pre-Expression of Interest (EoI) queries, it is evident that a sale will also cease to make it obligatory for the bank to follow the reservation policy as per government of India guidelines.

This, Rao feared, will deprive relevant segments of job seekers of their constitutional rights. As on March 31 this year, 8,322 employees out of a total of 17,430 were categorised as beneficiaries of the relevant government of India guidelines.

Response to pre-EoI queries

As per the responses to pre-EoI queries, nothing has been mentioned about assurance of protection to those currently with the bank.

The Association drew attention to the Preliminary Information Memorandum for inviting EoI released by the Department of Investment and Public Asset Management, Ministry of Finance, on October 7, and responses to pre-EoI queries on November 25.

A considerable amount of around ₹25,000 crore invested by the LIC at an average price of around ₹60 per share in January 2019, should fetch a minimum of ₹90 per share at a minimum expected rate of return (at 12 per cent).

But the current share price has been moving back and forth within a range of ₹40-₹45 per share. Any attempt to sell the stake of IDBI Bank below ₹90 per share will be an act of deception, Rao said.

Deposits at risk

Deposits with the bank stood at ₹2.30-lakh crore as on September and its sale will put this hard-earned money at great risk. As per the recent amendments to the Deposit Insurance and Credit Guarantee Corporation Act, an account holder will get up to ₹5 lakh within 90 days of the RBI imposing a moratorium.

Here, Rao recalled the woes of customers of erstwhile Punjab and Maharashtra Co-operative Bank (PMC Bank), Lakshmi Vilas Bank, and YES Bank.

IDBI Bank boasts more than 8.54 lakh basic savings bank deposit accounts with a deposit base of more than ₹353 crore under the Pradhan Mantri Jan DhanYojana; more than 14.70 lakh account holders under Pradhan Mantri Suraksha Bima Yojana; more than 7.21 lakh under the Pradhan Mantri Jeevan Bima Yojana; more than 3.58 lakh under the Atal Pension Yojana; 191 Aadhaar Enrolment Centres; and one Rural Self Employment Training Institute in Satara district.

Private players will promptly raise the minimum balance amount and introduce more service charges, Rao said.

No interest subvention

After re-classification as a private sector bank by the RBI, the metro and urban branches of the bank have stopped providing interest subvention on KCC loans to farmers since March 2019. If the bank goes into the hands of private players, even semi-urban and rural branches will stop lending to farmers and agriculturists.

It may also stop giving small loans normally offered as unsecured loans to small business customers as also small education loans to needy and poor students.

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