EAS Sarma Calls for Inquiry into IDBI Bank Disinvestment Decision
Former Secretary EAS Sarma urges suspension of IDBI Bank's disinvestment pending an independent investigation into the government's decision.
EAS Sarma demands an inquiry into the CCEA's decision on IDBI disinvestment.
The sale of a 60.72% stake in IDBI is criticized for undervaluation and legal implications.
Concerns raised about the impact on policyholders and employment opportunities for disadvantaged groups.
EAS Sarma, a former Secretary to the Government of India, has urged the Cabinet Committee on Economic Affairs (CCEA) to pause its recent decision regarding the disinvestment of IDBI Bank until an independent inquiry is conducted. This call follows the CCEA's approval on October 14 for the sale of government and LIC holdings in IDBI, which Sarma describes as ill-advised due to serious legal implications and undervaluation of the bank's assets.
In his correspondence with Finance Minister Nirmala Sitharaman, Sarma expressed concerns that the decision undermines the interests of millions of LIC policyholders and fails to consider the legal ramifications associated with the bank's valuable land assets. He noted that the CCEA's choice of M/s 10955230 Canada Inc. as the strategic buyer, with a purchase price of ₹52,878 crore for a 60.72% stake, represents a significant undervaluation of IDBI's intrinsic worth.
Sarma highlighted that LIC's equity stake, funded by its policyholders, has not been adequately protected in this transaction. He pointed out that the disinvestment reduces both the government and LIC to minority shareholders, stripping them of influence over IDBI's future policies. Additionally, he raised questions about whether the CCEA was fully informed of the legal issues surrounding the sale, particularly concerning land acquired under the premise of serving a public purpose.
The implications of this disinvestment extend beyond financial concerns, as it threatens employment opportunities for disadvantaged groups, including SCs, STs, and OBCs. Sarma emphasized that the privatization of IDBI could eliminate the benefits these groups currently enjoy under public sector employment policies, creating uncertainty for approximately 9,500 employees, including many women and individuals with disabilities.
Looking ahead, Sarma's call for an inquiry may prompt further scrutiny of the disinvestment process. With the potential for legal challenges and public backlash, the government will need to address these concerns before proceeding with the sale. The upcoming discussions in Parliament are expected to focus on the broader implications of this decision for both the banking sector and the social commitments tied to public sector employment.
