Money & Banking

IDBI Bank’s officers, employees' unions urge Government to drop proposal on stake sale

Our Bureau Mumbai | Updated on May 09, 2021

LIC is currently the promoter of IDBI Bank

The United Forum of IDBI Officers and Employees said its members may resort to industrial action if the Government does not drop its proposed move to sell IDBI Bank to a strategic buyer.

“We fervently urge upon the Government of India to drop its contemplated move to sell IDBI Bank to a strategic buyer, failing which the Officers and Employees will be left with no other option but to take recourse to organizational forms of action which on our part are anxious to avoid at this juncture,” the Forum’s Joint Convenors Ratnakar Wankhade and Vithal Koteswara Rao A.V., said in a letter to the Finance Minister.

The Government and the Life Insurance Corporation of India (LIC) together own 94.72 per cent of equity of IDBI Bank (Government: 45.48 per cent and LIC: 49.24 per cent). LIC is currently the promoter of IDBI Bank with management control and Government is the co-promoter.

The Forum demanded that the Government put in place stringent measures for recovering the Non-Performing Assets (NPAs) and fix accountability on all the concerned for the burgeoning NPAs and mammoth “write offs”.

The Joint Convenors observed that the request made by Unions and Associations repeatedly to initiate criminal proceedings against willful defaulters of Bank Loans has not been implemented by the Government so far.

“In case of sale of IDBI Bank to a strategic buyer. The private sector entities who will become the owners of the Bank will no longer be interested to cater to the needs of common man and general public with zero balance Savings Bank accounts,” the Forum said.

Various products/schemes of Government of India meant for common man and general public cannot be offered through a Bank owned by private entities, it added.

“Private Banks will be profit-oriented. We may be forced to collect minimum balance charges and other penalties from common man and general public to get more profits,” the Joint Convenors said.

They emphasised that India needs more Government Banks to improve financial inclusion parameters/aspects.

“Reduction in the number of Government Banks leads to less competition, which is nothing but monopoly. This is totally against the interest of the common man and general public,” the Forum said.

The Forum underscored that given that LIC is the promoter and Government is the co-promoter of IDBI Bank, common man and general public have continued their faith in the Bank because of which its deposits stood at Rs.2,30,898 crores as on March-end 2021.

“In case of sale of IDBI Bank to a strategic buyer, the hard-earned money of common man and general public will be at great risk,” the Joint Convenors said.

Published on May 09, 2021

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