Sitharaman targets Congress over IDBI Bank’s bad-loan legacy, defends strategic sale

Sitharaman was responding to Leader of Opposition Rahul Gandhi’s remark that the bid price for IDBI Bank's strategic sale was “seen” before a benchmark fair price was determined by independent valuers. The discovered price under the initial bidding process of Rs 75 per share was not approved by the designated government panel as the reserve price was higher, at Rs 94.42 per share. Subsequently, the first round was treated as having no further operative effect, and the Core Group of Secretaries on Disinvestment (CGD) determined the procedure for the second, or best-offer, round.

“We all know how @INCIndia used banks and financial institutions as their private fiefdoms and pressured bank employees to extend loans at their whim, bypassing prudent lending norms,” the minister said, citing several examples. “In the Congress era of banking, there was a phonebook for the powerful and a rulebook for ordinary citizens. The era of ‘connections and settings-based banking’ is now over,” she said.

Ordinary people now have easy access to loans, and bank employees are no longer under pressure to disburse loans based on phone calls, she added. Responding to a media report on the issue on Thursday, the Department of Investment and Public Asset Management (DIPAM) said the first round of bidding, conducted in FY26, was governed by indicative guidelines that allowed flexibility in complex strategic transactions.

On October 14, 2026, the government approved Fairfax Financial Holdings’ winning bid of Rs 81 per share, as it exceeded the benchmark fair value of Rs 75.99 per share determined by two independent valuation agencies. The transaction would fetch Rs 52,878 crore for the 60.72% stake being offloaded by the Centre (30.48%) and LIC (30.24%). The agencies used two valuation approaches: a market-multiple method, which assessed IDBI Bank relative to the financial performance of public sector banks, and an asset-valuation method, which accounted for the lender’s tangible and intangible assets and liabilities.

The dual approach was intended to bridge the gap between the bank’s market price and its underlying value, helping bring closure to a strategic sale process that has been underway for five years. IDBI Bank, once weighed down by substantial bad loans, has undergone a major turnaround following capital infusions, recoveries and a sustained clean-up of its loan book. The lender has returned to profitability and sharply reduced its gross non-performing assets from 31.8% in 2018 to just 2.3% in March 2026.