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New Delhi: All India Bank Employees’ Association (AIBEA) has opposed the government’s move to privatise IDBI Bank, terming the decision as a “retrograde” move.
The association said the government should control a minimum of 51% share capital of the bank.
The bank came into trouble as some private corporate houses cheated IDBI Bank by not repaying the loans taken, while the need of the hour is to take action against the defaulters and recover the money, the bank union said in a statement.
The Cabinet on Wednesday gave in-principle approval for strategic disinvestment along with transfer of management control in IDBI Bank in line with the Budget announcement earlier this year.
The central government and LIC together own more than 94% equity of IDBI Bank.
“The need is to take action on the defaulters and recover the money. Unfortunately, now the decision has been taken to sell the bank to a private company. IDBI Bank is a national asset and should not be sold away in this fashion. It is a retrograde move,” AIBEA said.
If sold to a private company, the existing reservation in jobs for SC/ST category will be withdrawn, it said, adding this is social injustice to the unemployed youth of this country.
The only major problem of the bank is its huge bad loans of Rs 36,000 crore as of March 31, 2021 (22%). Out of the operating profit of Rs 1,900 crore for the year ended March 2021, Rs 1,500 crore have been set off for provision for bad loans, AIBEA Secretary General C H Venkatachalam said.
“Now to camouflage these ills of the bank, the bank is being sold away. We express our strong protest against this decision and urge upon the government not to proceed with the sale of IDBI Bank,” he said.
AIBEA said bank’s deposits of Rs 2.3 lakh crore is people’s money and it should be used for their welfare and national development, not for the private corporate loot.
IDBI was started as a Development Financial Institution (DFI) in the 1960s. It was later converted as IDBI Bank much against the statute approved by Parliament earlier, it added. It said the bank played a leading role in financing industrial development in the country.