New Delhi: Finance Minister Nirmala Sitharaman on Friday launched a fresh attack on the Congress after Leader of Opposition Rahul Gandhi questioned the proposed sale of IDBI Bank to Canada-based financial holding company Fairfax and extended support to employees opposing the deal.
Responding to Gandhi’s criticism, Sitharaman accused previous Congress governments of treating banks and financial institutions as personal entities and pressuring employees to sanction loans to influential individuals and businesses without following prudent lending practices.
Her remarks came two days after the government had accused Gandhi of spreading “toxicity” over the situation at the Tata Group.
Sitharaman Cites Historical Banking Controversies
In her response, the Finance Minister cited several historical instances to support her allegations against the Congress.
She referred to the 1957 LIC-Mundhra controversy, alleging that businessman Haridas Mundhra received funds from the Life Insurance Corporation through the influence of Congress leaders.
She also cited the removal of State Bank of India Chairman RK Talwar in 1976, claiming that he had faced political pressure to relax lending conditions for a company linked to Sanjay Gandhi’s circle.
Sitharaman further alleged that Sanjay Gandhi had pressured the Central Bank of India over loans to Maruti. She also referred to former Minister of State for Finance B. Janardhana Poojary, accusing him of pressuring bank employees to issue loans during the 1980s.
The Finance Minister additionally named former UPA minister Pawan Kumar Bansal, alleging that he had pressured Canara Bank to extend loans to businesses linked to his family.
FM Says IDBI Bank Was Handed Over in Poor Financial Condition
Sitharaman claimed that IDBI Bank was handed over to the BJP-led government in a poor financial condition because of lending decisions made during earlier Congress-led governments.
She named several large corporate borrowers, including Videocon, Winsome, ABG Shipyard and Kingfisher, alleging that loans extended to business groups with connections to Congress leaders eventually turned into non-performing assets and caused significant losses to the bank.
According to Sitharaman, the NDA government under Prime Minister Narendra Modi revived IDBI Bank through professional management, prudent lending practices and recapitalisation exceeding Rs 25,000 crore.
She said the bank was now prepared for its next phase of growth and maintained that all required procedures had been followed in the proposed strategic restructuring.
Sitharaman Defends Proposed IDBI Bank Strategic Sale
Defending the government’s decision to proceed with the proposed sale, Sitharaman referred to the White Paper on the Indian Economy released in February 2024. She said it documented several instances of alleged scams and economic mismanagement during previous governments and remained relevant.
The Finance Minister also brought up Rahul Gandhi’s criticism of the Rafale deal, claiming that his allegations had been exposed and that he had been forced to apologise.
Sitharaman accused the Congress of operating a banking system in which influential people could secure loans through political connections, while ordinary citizens faced stricter rules.
She said the Modi government had ended what she described as “connection and setting banking”, adding that common people now had easier access to loans and bank employees were no longer pressured to approve lending requests through political phone calls.
The exchange marks another escalation in the political debate over IDBI Bank’s proposed sale, with Gandhi raising concerns about the bank’s public-sector character and employee protections, while the Finance Minister has defended the government’s record and the restructuring process.
