Employees and political parties oppose Fairfax Financial Holdings' IDBI Bank takeover
The proposed Rs 530 billion deal is facing criticism over the lender's valuation and the government's stake-sale process.
The Indian government approved the sale of a 60.72 per cent stake in IDBI Bank to Canadian firm Fairfax Financial Holdings for approximately Rs 530 billion ($5.59 billion) on October 14, according to Moneycontrol.
The deal involves the government and Life Insurance Corporation of India (LIC) selling a little over 60 per cent stake in the lender to Fairfax, marking the largest foreign investment in the country's banking sector.
The United Forum of IDBI Officers and Employees (UFIOE) held a nationwide strike on Tuesday for a second day to urge the government to halt the sale. UFIOE convenor Devidas Tuljapurkar questioned the valuation methodology, alleging that the bank is treated as a private sector bank for regulation but compared with public sector banks for valuation purposes.
Leader of Opposition Rahul Gandhi opposed transferring control of the bank to Fairfax, stating that public banks are tools to build the nation rather than assets to be sold off.
Finance Minister Nirmala Sitharaman defended the decision, stating IDBI Bank was left financially weak after years of lending to large corporate groups under previous administrations. She said the bank was revived through professionalism, prudence and recapitalisation of more than Rs 250 billion.
The Unorganised Workers and Employees Congress, a labour wing of the Congress Party, wrote to the Finance Minister on Monday seeking an independent investigation into the sale and warning of legal action. The finance ministry rejected reports that officials understated the bank's valuation, stating the Core Group of Secretaries on Disinvestment reviewed the methodology.