IDBI Bank divestment: Finance Minister Nirmala Sitharaman says Congress, UPA govt used banks, financial institutions as personal entities

Criticising Rahul Gandhi, Nirmala Sitharaman said his allegations over the Rafale deal had earlier been exposed and that he had to apologise. File | Photo Credit: X/@nsitharamanoffc

Amid the row over the divestment of IDBI Bank, Finance Minister Nirmala Sitharaman on Friday (October 30, 2026) took on the Congress and the previous United Progressive Alliance (UPA) government, alleging they used banks and financial institutions as "personal entities" and pressured bank employees to extend loans at their whim, bypassing prudent lending norms.

In a post on X, the Finance Minister also cited several instances from the Congress-led government, including the removal of State Bank of India (SBI) chairman R.K. Talwar in 1976 under Indira Gandhi's rule after he allegedly refused to give in to political pressure to relax lending norms for a company linked to Sanjay Gandhi.

She was responding to a post on X by senior Congress leader Rahul Gandhi on IDBI Bank.

On the remarks made by Mr. Gandhi, Ms. Sitharaman said, "IDBI Bank was handed over to us in poor shape, as IDBI itself was forced to lend to large business groups with close connections to @INCIndia leaders such as Videocon, Winsome, ABG Shipyard, and Kingfisher.

"These turned into bad loans, causing huge losses for IDBI Bank, which we recognised," she said in a social media post.

"The NDA govt led by Hon'ble PM Shri @narendramodi revived the IDBI Bank through professionalism, prudence and recapitalisation of more than ₹25,000 crores.

"The IDBI Bank is now poised for its next phase of growth," the Finance Minister said.

All due process has been followed in the IDBI Bank strategic restructuring, she added.

Mr. Gandhi expressed solidarity with IDBI Bank employees and questioned the government's decision to sell the profitable public bank to a Canadian firm. The Leader of the Opposition in the Lok Sabha asserted that public banks are not assets to be sold off; they are tools to build the nation.

In a letter to members of the IDBI Bank family, Mr. Gandhi said a group of IDBI Bank employees had met him at Parliament House in March 2025 and asked a simple question: why the government was selling a bank they had made profitable.

"I took that question to the Lok Sabha. I asked why a profitable public bank was being sold and how its employees and depositors would be protected. The government gave no reason. Now it has decided to sell IDBI Bank to Fairfax, a Canadian company," Mr. Gandhi said.

Criticising Mr. Gandhi, Ms. Sitharaman said his allegations over the Rafale deal had earlier been exposed and that he had to apologise.

"Your lies with respect to Rafale had failed and were exposed. You had to apologise. The same will happen here," she said.

Ms. Sitharaman further said, "Congress-era banking had a phonebook for the powerful and a rulebook for the common citizens.

"The era of 'connection and setting banking' is over. Common people now have easy access to loans, and employees are not under pressure to extend loans over the phone calls," the Minister said.

The government on October 14, 2026, approved the sale of a 60.72% stake in IDBI Bank to Canada's Fairfax Financial Holdings for about ₹53,000 crore ($5.5 billion), in what would be the largest foreign investment in an Indian bank and a major milestone in the country's long-delayed banking privatisation drive.

Fairfax will be the strategic buyer of the government's 30.48% stake, valued at about ₹26,620 crore, and the 30.24% stake held by the Life Insurance Corporation of India (LIC), valued at about ₹26,440 crore.

The strategic transaction is expected to be completed by the end of the current financial year, subject to regulatory clearance from the Reserve Bank of India (RBI).

Published - October 30, 2026 02:20 pm IST