'Era Of Connection & Setting Banking Is Over': FM Sitharaman Counters Rahul Gandhi Over IDBI Bank Sale

New Delhi, October 30: Finance Minister Nirmala Sitharaman defended the government's decision to divest a majority stake in public sector IDBI Bank, accusing former Congress-led governments of political interference that led to public sector banks accumulating vast non-performing assets. Reacting to Rahul Gandhi's criticism over the proposed IDBI Bank stake sale, Sitharaman alleged that Congress had used banks and financial institutions as personal entities, pressuring bank employees to extend loans arbitrarily, bypassing prudent lending norms.

She cited several instances of political interference, ranging from Indira Gandhi's removal of SBI Chairman R.K. Talwar in 1976 due to refusal to relax lending conditions for a company linked to Sanjay Gandhi's circle to B. Janardhana Poojary's pressure on bank employees to issue loans in the 1980s, and Pawan Kumar Bansal's intervention in Canara Bank's loan decisions in the 1990s.

Sitharaman highlighted that IDBI Bank had been handed over to the NDA government in poor shape, having lent to large business groups closely connected to Congress leaders, which resulted in huge losses that they recognized. The NDA government, led by Prime Minister Narendra Modi, revived IDBI Bank through professionalism, prudence, and recapitalization exceeding Rs 25,000 crores.

The IDBI Bank is now ready for its next phase of growth. Sitharaman emphasized that all due processes were followed in the strategic restructuring of IDBI Bank and reiterated that the previous Congress-era banking system was plagued by favoritism and corruption, which has now been replaced with fairer access to loans for common people and reduced employee pressure to issue loans based on phone calls.