Mumbai, October 16 — The Maharashtra Pradesh Congress Committee (MPCC) on Friday claimed that the Central Government’s decision to approve the sale of a combined 60.72 per cent majority stake in IDBI Bank, held jointly by the Government of India and the Life Insurance Corporation of India (LIC), to Canada-based Fairfax Financial Holdings Limited for Rs 52,283 crore is illegal, unconstitutional, and poses a grave threat to national security.
At the press conference, the MPCC's Economic Development head Vishwas Utagi vehemently opposed the proposed transaction, terming it a direct attack on India’s economy and public sector ecosystem.
Utagi argued that the Union Cabinet does not hold the legal authority to bypass Parliament to execute a majority sell-off of a public sector financial institution.
Such monumental decisions, he asserted, fall strictly under parliamentary jurisdiction. Transferring majority ownership (over 50%) of a public financial institution to a foreign corporation undermines national economic sovereignty.
“IDBI Bank’s valuation was drastically reduced over time—falling from initial government expectations of Rs 1 lakh crore down to Rs 82,000 crore, then Rs 72,000 crore, and finally settling at Rs 52,283 crore. LIC originally invested in IDBI Bank shares in 2018 at a price of Rs 61 per share. Selling these shares at a lower price dictated by foreign buyers inflicts direct losses on millions of LIC policyholders,” said Utagi.
While foreign direct investment (FDI) in private banks is capped at 49%, Utagi questioned how the government could permit a foreign entity to hold nearly 61% in a strategic public institution.
"IDBI Bank is a highly profitable institution equipped with prime land assets worth over Rs 1 lakh crore in Mumbai and Hyderabad, alongside a nationwide network of over 2,200 branches. Selling this asset to a foreign firm is anti-public interest and sets a dangerous precedent for the entire public sector banking framework," he remarked.
Utagi highlighted that IDBI Bank, established in 1964 as a Development Financial Institution (DFI) before transforming into a universal bank, has posted extraordinary growth and strong profits over the past five years.
Public sector banks have historically proven their resilience during economic crises and serve as crucial implementation arms for socio-economic government welfare schemes.
He warned that privatisation of IDBI Bank marks the beginning of a broader plan to dismantle public banking in India, alleging a government intention to consolidate 12 major public sector banks (including SBI) down to just three.
In response to the Union Government's move, a petition challenging the legality of the stake sale has been filed in the Bombay High Court, where judicial proceedings are currently underway.
Utagi said that the economic wing reiterated its demand for an immediate withdrawal of the proposed sale to safeguard public money and national economic stability.