Four unions in IDBI Bank have written to the Finance Minister requesting that the proposed sale of their bank to private players by the government and LIC of India be stopped and the bank be re-classified as a public sector bank.
This comes in the wake of the Department of Investment & Public Asset Management (DIPAM), on behalf of GoI, moving to engage legal advisor and transaction Advisor for facilitating/ assisting it in the process of strategic disinvestment of IDBI Bank along with transfer of management control.
The four unions — All India IDBI Officers’ Association, IDBI Officers’ Organisation, All India IDBI Employees’ Association and IDBI Karmachari Sangh — emphasised that all the staff had secured job in IDBI Bank through All India competitive exam.
“Many officers left their previous job with public sector banks and the Central government to join IDBI Bank,” per a joint statement.
Risk to employment
The unions feared that in case of sale of IDBI Bank to private players, as proposed by the government and LIC, the fate of around 17,000 families supported by direct employment and around 20,000 families supported by indirect employment with IDBI Bank will be at risk.
According to the statement, around 50 per cent of staff working in IDBI Bank under direct or indirect employment are female employees. More than 100 officers under direct employment are either physically challenged or visually impaired.
Serve the common man
AV Vithal Koteswara Rao, General Secretary, AIIDBIOA, underscored that IDBI Bank, being majority owned by LIC (promoter with management control) and GoI (co-promoter), is catering to the needs of the common man with zero balance Savings Bank accounts and offering aggressively various Government products and schemes.
So, if IDBI Bank is sold to a strategic buyer, various products and schemes of GoI which are meant for the common man and general public cannot be offered through a Bank owned by private entities, he added.
“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,” Rao said.
He felt that the government should explore the possibility of amalgamation of IDBI Bank with either State Bank of India, Bank of India, Central Bank of India or Bank of Maharashtra so that the Government’s cause of financial inclusion, credit outreach to MSMEs and agriculture, and support to the ₹100-lakh crore ‘PM Gati Shakti Master Plan’ for developing holistic infrastructure is better served.
The Cabinet Committee on Economic Affairs had given its in-principle approval in May 2021 for strategic disinvestment along with transfer of management control in IDBI Bank.
The extent of respective shareholding to be divested by GoI and LIC shall be decided at the time of structuring of transaction in consultation with RBI, per a CCEA statement.
GoI and LIC together own more than 94 per cent of equity of IDBI Bank (GoI at 45.48 per cent, LIC at 49.24 per cent). LIC is currently the promoter of IDBI Bank with Management Control and GoI is the co-promoter.
The government intends to come out with expression of interest for strategic disinvestment of IDBI Bank by December.