Finance Minister Nirmala Sitharaman has accused the previous Congress-led United Progressive Alliance (UPA) government of manipulating banks and financial institutions for personal gains. On Friday, she responded to Rahul Gandhi's criticism of the IDBI Bank sale to Fairfax Financial Holdings, alleging that the Congress pressured bank employees to lend indiscriminately.
In a social media post, Sitharaman highlighted historical instances, such as the removal of State Bank of India chairman R. K. Talwar in 1976, who was allegedly ousted for resisting political pressure to relax lending norms for a company linked to Sanjay Gandhi. She claimed that under Congress, banks were forced to lend to large business groups with ties to Congress leaders, resulting in bad loans and financial losses.
Gandhi had questioned the government's decision to sell IDBI Bank, a profitable public entity, to a Canadian firm. He expressed solidarity with IDBI Bank employees, who had approached him in March 2025, questioning the rationale behind selling a bank they had helped turn profitable. Gandhi argued that public banks are national assets, not commodities to be sold off.
Sitharaman countered by asserting that the National Democratic Alliance (NDA) government, led by Prime Minister Narendra Modi, had revived IDBI Bank through professionalism and a recapitalization of more than ₹25,000 crore. She emphasized that the bank is now ready for a new phase of growth and that all due processes were followed in its strategic restructuring.
She further criticized Gandhi by referencing his past allegations about the Rafale deal, which she claimed had been debunked, forcing him to apologize.
The government approved the sale of a 60.72% stake in IDBI Bank to Fairfax for approximately ₹53,000 crore ($5.5 billion) on October 14, 2026. This transaction marks the largest foreign investment in an Indian bank and a significant step in India's banking privatization efforts. Fairfax will acquire the government's 30.48% stake, valued at about ₹26,620 crore, and the Life Insurance Corporation of India's 30.24% stake, valued at approximately ₹26,440 crore.
The strategic sale is expected to conclude by the end of the current financial year, pending regulatory approval from the Reserve Bank of India. Sitharaman assured that the era of "connection and setting banking" is over, stating that common people now have easier access to loans without undue pressure on bank employees.
Gandhi's criticism comes amid ongoing debates about the privatization of public sector banks in India. He has consistently voiced concerns over the sale of national assets, arguing that such moves undermine the country's economic sovereignty. His stance reflects a broader opposition within Congress to the government's privatization policies.
Sitharaman's rebuttal underscores the political tensions surrounding the sale. Her remarks aim to highlight the NDA's efforts to reform the banking sector and distance it from past practices under Congress rule. The Finance Minister's statements also serve to reinforce the government's commitment to transparency and accountability in financial transactions.
