Government clarified on IDBI Bank Strike, DFS said- Now IDBI is a private sector bank, the board will take the decision

IDBI Bank employees went on strike against the privatization of the bank. The union said it was against the promise made in Parliament. On behalf of the government, DFS replied that IDBI is now a private bank and the bank board will take decisions related to the employees.

IDBI Bank Strike: These days, the most discussed topic in the banking sector of the country is IDBI Bank. The employees' union is constantly opposing the privatization of the bank, and a strike was also held recently regarding this. But now the answer has come from the Department of Financial Services (DFS) on this strike. DFS has clearly said that IDBI Bank is now a private sector bank and the bank board will take decisions related to the employees directly; the ministry has no role in this.

Why did the strike happen?

The All India Bank Officers' Confederation (AIBOC) issued a statement on Wednesday and criticized the government's decision. The union says that the privatization of IDBI Bank is against the assurance given in Parliament, in which the then Finance Minister had promised in 2003 that the government will always maintain at least 51% stake in IDBI Bank.

The union alleges that the privatization of IDBI Bank is not just a matter of selling shares, but it is like selling people's savings. They say that when there are public sector banks, they work for the welfare of the common people, but private banks run only for profits.

Government's stand

The Department of Financial Services (DFS) has taken a tough stand on the strike. According to DFS, IDBI Bank has already got the status of a private bank in January 2019. The Reserve Bank had put it in the private bank category on 21 January 2019. All decisions related to the service conditions and human resources of the employees will now be taken by the bank board itself. The ministry has no interference in the strike or reconciliation meeting.

Where did this dispute start?

IDBI Bank was once a part of the public sector, but a big change started in it from the year 2019. In 2019, LIC bought more than 82 crore shares in the bank and made it its subsidiary. But in December 2020, LIC's stake came down to 49.24%, giving the bank the status of "associate company". At present, the government and LIC together hold about 95% stake. Preparations are underway to sell 60.72% of this, which is part of the disinvestment program.

DIPAM Secretary Arunish Chawla recently said that the stake sale of IDBI Bank is expected to be completed within this financial year itself, as qualified bidders have almost finished due diligence.

Why did the concern of employees increase?

Employee unions fear that their jobs and facilities will be affected after privatization. They say that the government should strengthen the bank, focus on digital modernization and infuse capital.

AIBOC says that if the government really wants to strengthen the country's banks, then instead of privatization, it should focus on banking governance and accountability.

It remains to be seen how the government takes its privatization plan forward. On one hand, the government and DFS say that IDBI Bank is now a private sector bank and its decisions will be taken by the bank board itself, while on the other hand the union is continuously protesting citing the promise made in the Parliament.

If the stake sale is completed, then IDBI Bank will go completely into private hands and this will be a big change for the country's banking sector.