IDBI employees’ forum opposes stake sale to Fairfax, seeks review

The United Forum of IDBI Officers & Employees expressed “profound concern” over the Centre’s reported decision to proceed with the strategic disinvestment of its controlling stake in IDBI Bank in favour of Fairfax Financial Holdings, subject to regulatory and statutory approvals, and sought a parliamentary review of the proposed sale.

The Forum urged the government to immediately place the complete proposal relating to the strategic sale in the public domain, review the decision in light of India’s “long-term financial and economic sovereignty”, honour assurances made before Parliament during the bank’s restructuring, and ensure a parliamentary discussion before any irreversible decision is taken.

It also called on the government to protect the interests of employees, depositors and customers while preserving public ownership of strategically important banking institutions serving national developmental objectives.

The Centre has been pursuing the strategic sale of IDBI Bank since 2022. The government and the Life Insurance Corporation of India (LIC) together are selling a 60.72 per cent stake in the lender, comprising 30.48 per cent held by the government and 30.24 per cent by LIC, along with transfer of management control. The transaction has been delayed due to regulatory approvals and completion of the due diligence process by prospective bidders.

Fairfax Financial Holdings, the Canada-based investment firm led by Prem Watsa, has emerged as the frontrunner after reports indicated it is in advanced talks with the government. The proposed transaction remains subject to regulatory and statutory approvals.

“This development is not merely a commercial transaction. It concerns the ownership and control of one of India’s strategically important financial institutions and therefore raises questions touching upon constitutional governance, economic sovereignty, parliamentary accountability and long-term national interest,” the Forum said.

It added that IDBI Bank, established as a development finance institution, played a key role in financing industrialisation and infrastructure projects. Substantial public resources were also deployed to revive the lender during periods of financial stress, and that employees accepted difficult restructuring measures that helped restore the bank to sustained profitability.

“Now, when the Bank has returned to sustained profitability and financial stability, the proposal to transfer ownership raises serious questions of public policy,” it said.

Arguing that the proposed sale runs counter to the government’s Atmanirbhar Bharat vision, the Forum said: “Financial sovereignty constitutes an essential pillar of national sovereignty. The banking system mobilises the hard-earned savings of millions of citizens and channels them towards national development.”

The employees’ body also said the proposed transaction reflects “a broader policy trend whereby institutions revived through public investment are subsequently transferred to private ownership after the risks have been absorbed by the public”, adding that such an approach warrants wider public debate.

The strategic disinvestment is part of the government’s broader privatisation programme aimed at reducing its presence in non-strategic sectors while unlocking value from public sector enterprises. However, employee unions have consistently opposed the proposed sale, arguing that the lender should remain under public ownership given its strategic role in India’s financial system.