IDBI Bank Was Handed to Us in Bad Shape': Nirmala Sitharaman Responds to Rahul Gandhi

NEW DELHI: Union Finance Minister Nirmala Sitharaman has criticised Congress leader and Leader of Opposition Rahul Gandhi over his opposition to the proposed sale of IDBI Bank, defending the government's decision and highlighting the financial challenges the bank faced before the NDA came to power.

The exchange follows Rahul Gandhi's criticism of the Centre's decision to sell IDBI Bank to Canadian billionaire Prem Watsa's Fairfax Group. Gandhi had questioned the need to privatise a lender that had returned to profitability and expressed concerns about the future of its employees.

Nirmala Sitharaman defends the IDBI Bank sale, accusing Congress of past bad lending practices amid Rahul Gandhi's criticism.

Responding through a post on X on Friday, Sitharaman alleged that previous Congress-led governments had pressured public sector banks to provide loans to politically connected businesses without following proper financial safeguards.

She said IDBI Bank was in poor financial condition when the NDA government took office and pointed to major corporate loan defaults involving companies such as Videocon, Winsome, ABG Shipyard and Kingfisher.

According to the Finance Minister, these bad loans had contributed to substantial financial losses for the bank.

Sitharaman Credits NDA Government for IDBI Bank's Recovery

Defending the government's record, Sitharaman said the NDA administration had taken steps to restore IDBI Bank's financial position through professional management, improved lending practices and significant capital support.

She stated that more than Rs 25,000 crore had been infused into the bank as part of its revival efforts.

Sitharaman argued that the lender had undergone substantial improvements and was now prepared for its next phase of growth.

She also accused the Congress of interfering in banking decisions and encouraging lending practices that exposed financial institutions to significant risks.

Rahul Gandhi Questions the Proposed Bank Sale

Earlier, Rahul Gandhi had opposed the government's decision to sell IDBI Bank, expressing solidarity with its employees and questioning the broader implications of the transaction.

In a post on X on Thursday, Gandhi argued that IDBI Bank was originally established to support India's industrial development and criticised the government's approach towards public sector banking.

He contrasted the Congress government's expansion of banking institutions with the Modi government's decision to sell government-owned banks.

Gandhi also shared a letter addressed to IDBI Bank employees, acknowledging their contribution to the lender's financial turnaround. He raised concerns about employee security, reservation policies and the government's reduced ownership following the proposed transaction.

Earlier Clash Over Tata Group Remarks

The latest exchange is part of a wider political confrontation between Sitharaman and Gandhi. Just two days earlier, the Finance Minister had responded to the Congress leader's comments about the Tata Group.

Gandhi had alleged that the Tata Group was being "criminally destroyed" and accused the Modi government of creating an environment in which business leaders were reluctant to speak against the Centre.

He also claimed that Indian businesses were increasingly being influenced by Prime Minister Narendra Modi and Union Home Minister Amit Shah.

Sitharaman rejected the allegations, accusing Gandhi of politicising commercial and legal matters and spreading distrust towards Indian businesses.

She questioned his repeated criticism of Indian industry and entrepreneurs, arguing that such statements could undermine confidence in the country's business environment.

IDBI Bank Sale Becomes Fresh Political Flashpoint

The proposed IDBI Bank disinvestment has now become another point of confrontation between the ruling BJP and the Congress.

While the government has defended the transaction as part of its broader approach to banking reforms and strategic disinvestment, the opposition has raised concerns about public ownership, employee interests and the future of the institution.

The latest remarks from Sitharaman and Gandhi have intensified the political debate over the government's banking policies and the role of public sector financial institutions in India's economic development.