IDBI bank divestment: Finance minister Nirmala Sitharaman says Congress, UPA government used banks and financial institutions as personal entities

Nirmala Sitharaman slammed Rahul Gandhi and said that his allegations regarding the Rafale deal had been exposed earlier and that he must apologise. File | Photo credit: X/@nsitharamanoffc

Amid the IDBI Bank divestment row, Finance Minister Nirmala Sitharaman on Friday (Oct 30, 2026) took on the Congress and the previous United Progressive Alliance (UPA) government, alleging that they used banks and financial institutions as “personal entities” and pressured bank employees to lend at their whim, circumventing prudential lending norms.

In a post on X, the finance minister also cited several instances from the Congress-led government, including the dismissal of State Bank of India (SBI) chairman RK Talwar in 1976 during the Indira Gandhi government after he allegedly refused to bow 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 at IDBI Bank.

On Mr Gandhi’s remarks, Ms Sitharaman said: “IDBI Bank was handed over to us in a bad shape as IDBI itself was forced to lend to big business groups with close links to @INCIndia leaders like Videocon, Winsome, ABG Shipyard and Kingfisher.

“These have turned into bad loans, causing huge losses to IDBI Bank, which we have acknowledged,” she said in a post on social media.

“The NDA Government led by Hon’ble Prime Minister Shri @narendramodi has revived IDBI Bank through professionalism, prudence and recapitalization of over ₹25,000 crore.

“IDBI Bank is now poised for the next phase of growth,” the finance minister said.

All due process was followed in the strategic restructuring of IDBI Bank, she added.

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

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

“I have taken this issue to the Lok Sabha. I have asked why a profitable public bank is being sold and how its employees and depositors will be protected. The government has not given any reason. Now it has decided to sell IDBI Bank Fairfax, a Canadian company,” Gandhi said.

Ms. Sitharaman criticized Mr. Gandhi, saying that his allegations regarding the Rafale deal had been exposed earlier and that he must apologise.

“Your lies about the Rafale backfired and were exposed. You had to apologize. The same will happen here,” she said.

Ms. Sitharaman further said, “Congress-era banking had a phone book for the powerful and a rule book for the common man.

“The era of ‘connect and set banking’ is over. Ordinary people now have easy access to loans and employees are not under pressure to lend over the phone,” the minister said.

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

Fairfax will be a strategic buyer of the government’s 30.48% stake worth about ₹26,620 crore and the 30.24% stake held by Life Insurance Corporation of India (LIC) worth 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 – 30 Oct 2026 14:20 IST