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IDBI Bank Employees Observe Strike Against Privatisation – In September, Finance Minister Arun Jaitley had hinted at changing the characteristics of IDBI Bank on the lines of Axis Bank.
IDBI Bank saw a one-day employees strike today with staff unions protesting against the government’s plan to dilute its stake in the lender and privatise it on the lines of Axis Bank.
Employee unions claimed the strike was a “complete success”, but management sources said officers reported for work.
The government currently owns 76.5 per cent in the infra-lender-turned commercial bank, which is grappling with high bad loans and other legacy issues like low retail penetration, among others.
The employees were protesting under the banner of United Forum of IDBI Officers & Employees, and were supported by the All India Bank Officers Association.
“We are against the government plans to sell its stake in IDBI Bank to private players to achieve its disinvestment target of Rs 69,500 crore (in 2015-16),” a union member said.
However, a bank official said there has not been any formal communication from the government on whether it wants to dilute its stake or not.
In the case of Axis Bank, the government indirectly owns 29.54 per cent in the lender through the administrator of Specified Undertaking of the Unit Trust of India (SUUTI), Life Insurance Corporation and four other public sector general insurance companies.
Its direct holding through SUUTI is a little over 11 per cent in the third largest private lender. Axis Bank was created after UTI, the then largest mutual fund house promoted by the government, went bust in early 1990s. The scam-hit fund house was trifurcated into UTI- SUUTI, Axis Bank and UTI AMC. The government’s residual stake in the private bank is being held by SUUTI.
In September, Finance Minister Arun Jaitley had hinted at changing the characteristics of IDBI Bank on the lines of Axis Bank.
“Take Axis Bank for instance, and that is the model where, through various government instrumentalities, there’s a major shareholding that the government has, but the government maintains an arm’s length distance and it is a bank which has done remarkably well.
“Therefore, can we, with regard to any other institution that we have, like IDBI, follow that model?” Jaitley had said. In October, Minister of State for Finance Jayant Sinha had said, “We’ll consider transforming IDBI Bank in a manner similar to the way Axis Bank was done.”
The PSU bank came into existence after Parliament passed the IDBI Repeal Act in 2003. Under terms of the Act, IDBI has been functioning as a bank in addition to its earlier role of a financial institution.
Source: The Hindu