IDBI Bank employees and officers have begun a two-day nationwide strike on November 2, stepping up their opposition to the proposed sale of a controlling stake in the lender to Canada’s Fairfax Financial Holdings.
The agitation, called by the United Forum of IDBI Officers & Employees (UFIOE), seeks to press the government to withdraw the proposed privatisation and reconsider the transfer of management control to a foreign investor. The protest is scheduled across IDBI Bank branches and offices on November 2 and 3.
The employees’ opposition goes beyond concerns over a change in ownership. The union has questioned the rationale for selling a bank that has returned to profitability after years of financial stress. It argues that the turnaround was made possible by substantial public-sector capital support and the efforts of its workforce.
In a communication dated October 22, the United Forum of Bank Unions (UFBU), an umbrella body representing several bank employee organisations, extended support to the IDBI employees’ agitation. It called on its members to participate in solidarity programmes, including wearing protest badges on November 2.
Why are IDBI employees opposing the Fairfax deal?
The Centre’s proposed transaction involves the sale of a combined 60.72% stake in IDBI Bank, comprising 30.48% held by the Government of India and 30.24% held by the Life Insurance Corporation of India (LIC), to a subsidiary of Fairfax Financial Holdings.
The Cabinet Committee on Economic Affairs approved Fairfax as the strategic buyer on October 14, for a consideration of ₹52,878.08 crore.
Following the transaction, the government will retain a 15% stake and LIC will hold 19%, with management control passing to the strategic buyer, subject to regulatory approvals.
The UFIOE has called on the government to abandon the disinvestment process and acquire an additional 6% stake in the bank, either from LIC or through market purchases, to ensure that government ownership remains at a minimum of 51%.
The union has cited assurances made by then Finance Minister Jaswant Singh during parliamentary discussions in December 2003, when legislation to convert IDBI into a banking company was being considered. It maintains that the government had committed to retaining majority ownership of the institution.
The Finance Ministry, however, has disputed this interpretation. In a clarification issued on October 17, the government pointed out that an amendment seeking to restrict dilution of its stake was not incorporated into the final IDBI (Repeal) Act, 2003. It also cited a December 2018 Delhi High Court judgment, which held that statements made during parliamentary debates did not prevent the government from subsequently reducing its shareholding.
Union questions valuation, cites ₹30,100 crore in profits
A key argument in the employees’ campaign is that IDBI Bank’s financial recovery should be taken into account before its ownership is transferred.
According to the UFIOE, the bank has accumulated net profits of ₹30,106.43 crore over the past six years. The union has also highlighted the improvement in asset quality, with the gross non-performing asset (NPA) ratio declining from 31.78% in 2018 to 2.30%. Net NPAs stand at 0.16%, while the capital adequacy ratio is 26.38% and the provision coverage ratio is 99.31%.
The employees’ body has also pointed to more than ₹46,000 crore in capital support from the government and LIC during the bank’s difficult years between 2016 and 2020.
It argues that the turnaround reflects not only the contribution of public funds but also the efforts of employees who retained customers, maintained operations and helped rebuild confidence in the lender.
The union has described the proposed sale valuation as inadequate and called for greater transparency in the transaction. It has sought full disclosure and an independent examination of the valuation process before the deal progresses further.
The government, meanwhile, has defended its valuation methodology. According to the Finance Ministry’s October 14 announcement, two independent valuation exercises arrived at an average benchmark value of ₹75.99 per share. Fairfax’s winning offer of ₹81 per share was above this benchmark as well as the individual fair-value estimates.
The government has also clarified that the transaction followed a competitive bidding process and that the bank’s volatile market price was not considered an appropriate standalone indicator of its intrinsic value.
Employees seek guarantees on jobs, pensions and service conditions
Apart from opposing the ownership transfer, the UFIOE has raised concerns about the implications of privatisation for employees.
The forum has sought written, legally binding assurances that existing service conditions, employee welfare provisions, pension entitlements and reservation policies will remain protected.
It has also demanded that industry-wide wage revisions and pension benefits continue.
If the sale goes through, the union wants existing officers and employees to be given the option of moving to public sector banks without losing their service records, pay scales, seniority, salaries or retirement benefits.
Another demand is the absorption of contractual and outsourced workers currently employed by IDBI Bank.
The forum has also raised concerns about the potential impact of the change in ownership on depositors, farmers and small borrowers. It argues that the lender has played an important role in industrial development, financial inclusion and the implementation of government welfare schemes.
Bank assures customers of uninterrupted digital services
IDBI Bank issued a customer advisory ahead of the two-day agitation, saying it would make efforts to ensure that banking transactions remain normal during the proposed strike.
In a communication posted on its official social media account, the bank advised customers to complete important transactions in advance and use alternative banking channels wherever necessary.
It said its internet banking services, Go Mobile+, UPI, ATMs and customer service points would remain operational. The bank also announced that withdrawals from other banks’ ATMs would be available free of charge on November 2 and 3.
Meanwhile, the UFBU has called on employees across its constituent unions to wear badges in solidarity with the IDBI workforce on November 2.
The UFIOE has indicated that the agitation could be intensified if its demands remain unresolved, including the possibility of a longer or indefinite strike. The forum has maintained that it remains open to discussions with the government and bank management.