IDBI Bank employees oppose Fairfax stake sale, demand parliamentary review

An employees’ body at IDBI Bank has demanded an immediate halt to the divestment of majority stake of the lender to Canada’s Fairfax Financial Holdings and sought a detailed parliamentary examination of the matter.

The United Forum of IDBI Officers and Employees had expressed concerns over the bank’s valuation, transparency of the deal and the effect on employees, customers and financial inclusion, the Press Trust of India reported Thursday.

The government on Oct. 14 approved the sale of a 60.72% stake in IDBI Bank to Fairfax for approximately 52,878 crore rupees ($5.6 billion). The transaction involves a 30.48% stake held by the government and 30.24% held by the Life Insurance Corporation of India.

“The transaction may be undervaluing IDBI’s properties, institutional strength, customer profile, profit earning capacity and strategic importance and we are very apprehensive about it,” said forum convenor Devidas Tuljapurkar at the national convention on bank privatisation.

The forum demanded the valuation approach to Fairfax and due-diligence reports, while requesting preservation of service conditions for employees, reservation policies for customers and other safeguards.

It contended that handing over control to a foreign agency would jeopardise the bank’s developmental function and India’s financial independence.