The United Forum of IDBI Officers and Employees has urged the Department of Investment and Public Asset Management (DIPAM) to take up with the Centre the issue of the proposed sale of IDBI Bank to private/foreign players and ensure its share in the bank doesn’t come below 51 per cent. It raised a charter of demands in a memorandum submitted to the DIPAM on Thursday. Earlier, constituents All-India IDBI Officers Association and All-India Industrial Development Bank Employees Association held a dharna in front of Jantar Mantar, New Delhi, as part of protests as far back as 2021 against the Centre’s move.

Assurance in Parliament

The memorandum recalled how then-finance minister Jaswant Singh had categorically assured the Lok Sabha on December 8, 2003, and the Rajya Sabha a week later the Centre shall retain its shareholding at not less than 51 per cent. This solemn assurance should be kept at all costs. “We oppose the proposed sale of IDBI Bank to private/foreign players as per DIPAM’s notification,” the United Forum noted.  The public has reposed faith in the bank since the Centre holds a 45.48 per cent share as a promoter. Deposits stood at ₹2,77,657 crore as of March 31, 2024. As per recent amendments to the Deposit Insurance and Credit Guarantee Corporation Act, an account holder will get up to only ₹5 lakh within 90 days of the RBI declaring a moratorium.

Guaranteed coverage

But in the present arrangement when both the Centre and LIC are promoters, deposit money of any size in the bank is safe. The moment it comes out of their ownership, guaranteed coverage will come down drastically to ₹5 lakh, and that too after a wait of 90 days in some cases. In this context, the United Forum pointed to the plight of customers of erstwhile Punjab & Maharashtra Cooperative Bank (PMC Bank), Lakshmi Vilas Bank, and YES Bank which are currently run by private entities.

Minimum balances

If IDBI Bank is sold, it is likely minimum balance requirements and service charges might go up with implications for more than 8.54 lakh basic savings bank deposit accounts with a deposit base of more than ₹353 crore under the Pradhan Mantri Jan Dhan Yojana (PMJDY); 14.70 lakh account holders under the Pradhan Mantri Suraksha Bima Yojana (PMSBY); 7.21 lakh-plus under the Pradhan Mantri Jeevan Bima Yojana (PMJJBY); and 3.58 lakh-plus under the Atal Pension Yojana (APY). 

Due to the reclassification of the bank as a ‘private sector bank, the metro and urban branches have stopped providing interest subvention in KCC loans to farmers since March 2019. If the bank goes into the hands of private players, this could extend to even semi-urban and rural branches. The United Forum feared that the bank would be forced to stop giving Mudra, PMSVANIDHI and Standup India loans as unsecured loans to small business customers. Even unsecured small education loans extended to needy and poor students may no longer be available. 

Threat to job security

The United Forum apprehends there will be a ‘great threat to job and job security’ if a ‘hire and fire’ policy gets implemented, particularly in respect of women employees an physically challenged. The bank currently employs at least 5,400 permanent women employees and 470 permanent employees who are physically challenged/visually impaired. All staff had undergone all-India level competition to secure the job in a bank that was owned by Government of India. In the process, many officers had left their previous jobs with public sector banks/Central Government. The fate of an estimated 18,000 families supported by permanent employees and 20,000 families supported by contractual/temporary/casual employees too will be at risk. 

Related Topics