The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement:
No to Privatisation of Banks
The Polit Bureau of the CPI(M) expresses its strong opposition to the Union Cabinet’s decision approving the sale of 60.72 per cent of shares of the IDBI Bank to Fairfax Financial Holdings, Canada. This is a blatant violation of RBI guidelines that prohibit foreign entities from holding more than 26 per cent voting rights in Indian Banks. Fairfax already has 40 per cent shares in Catholic Syrian Bank. The IDBI, which was suffering huge losses continuously for a period of five years, has made a turnaround and is making profits after LIC bought 51 per cent shares at the request of the government.
What is even more dubious is that the prices of shares of the IDBI have been brought down from the earlier valuation to help Fairfax. In the wake of many controversies, earlier, Fairfax and their auditors were fined Rs 50 lakhs. There are also reports that the Niti Ayog has recommended privatisation of profit-making public banks like Central Bank of India and Indian Overseas Bank.
Privatisation will adversely impact social sector lending and the interests of small depositors. With increasing inequality, public banks have a huge responsibility to reach banking to the masses as well as provide credit to all.
The CPI(M) demands that the government desist from going ahead with its plans to divest its share in public sector banks.