'Banks were created, now they are being sold': Rahul Gandhi, Sitharaman spar over IDBI

Finance minister Nirmala Sitharaman on Friday defended the proposed sale of IDBI Bank, hitting back at Congress leader Rahul Gandhi over his criticism of the government's decision to divest its stake in the lender. She accused previous Congress governments of allowing politically connected businesses to secure loans from public sector banks without following sound lending practices.

The exchange follows Gandhi's opposition to the proposed sale of IDBI Bank to Canadian company Fairfax. The Leader of Opposition had questioned why the government was selling a lender that had returned to profitability and raised concerns about the future of its employees, reservation policies and the Centre's reduced stake after the transaction.

Sitharaman blames Congress-era lending practices

Responding to Gandhi in a post on X, Sitharaman said IDBI Bank was in poor financial condition when the NDA government took charge. She alleged that the lender had been forced to extend loans to large business groups with links to Congress leaders, several of which eventually turned into bad debts.

"IDBI Bank was handed over to us in poor shape," Sitharaman said, naming Videocon, Winsome, ABG Shipyard and Kingfisher among the companies whose loan defaults had caused substantial losses to the bank.

The Finance Minister said the Modi government had worked towards reviving the lender through professional management, prudent lending practices and recapitalisation of more than Rs 25,000 crore.

"IDBI Bank is now poised for its next phase of growth," she said.

She also accused the Congress of exerting political pressure on banks and financial institutions to sanction loans without adequate consideration of lending risks.

What Rahul Gandhi said about IDBI Bank sale

Gandhi had criticised the proposed transaction on Thursday, arguing that the Congress had established IDBI to support India's industrial development, while the present government was selling public sector banks.

"During Congress's time, banks were being created. During Modi's time, they are being sold," he said.

He also shared a letter addressed to IDBI Bank employees, crediting them with the lender's turnaround and expressing support for their concerns over the proposed sale.

Sitharaman, Gandhi trade barbs over Tata Group

The latest exchange comes two days after Sitharaman and Gandhi clashed over the Congress leader's remarks on the Tata Group.

On Wednesday, Gandhi had alleged that the conglomerate was being "criminally destroyed" and claimed that Indian businesses were being treated as the "plaything" of Prime Minister Narendra Modi and Home Minister Amit Shah.

Responding to the remarks, Sitharaman accused Gandhi of politicising commercial and legal matters.

"Being the Leader of the Opposition, I suggest you refrain from politicising every issue. Also, casually labelling commercial and legal matters as criminal is unacceptable," she said in a post on X.

She further questioned Gandhi's criticism of Indian industry and entrepreneurs, asking whether he was trying to encourage business leaders to join him in spreading distrust.