The Forum said Parliament should be fully informed before the Government proceeds with a divestment that would sharply reduce its residual stake.
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The United Forum of IDBI Officers and Employees has urged the Parliamentary Standing Committee on Finance to examine the historical record behind the Government’s proposed divestment of IDBI Bank, including the Lok Sabha and Rajya Sabha debates of December 2003 and the then Finance Minister’s assurance that Government ownership would not fall below 51 per cent.Solemn assurance In a representation to the panel, the Forum said an executive decision to dilute Government ownership could not be allowed to render a solemn Parliamentary assurance institutionally meaningless without Parliament being fully informed of the circumstances and reasons for the departure.The Forum has asked the committee to call for the complete record relating to the 46th Report of the Standing Committee on Finance, including the relevant Parliamentary debates; the Finance Minister’s assurance; its subsequent treatment by the Committee on Government Assurances; and all later decisions that allowed Government ownership to fall below the assured threshold.Distress to turnaroundThe Forum said the circumstances cited in support of privatisation had changed materially. IDBI Bank was in severe financial distress when the proposal took shape, with substantial stressed assets, losses and its placement under the Reserve Bank of India’s Prompt Corrective Action framework.The bank has since undergone a significant financial turnaround and returned to sustained profitability, it said. That raises a fundamental policy question, according to the Forum: if the institution whose financial weakness originally formed the basis for privatisation has since been rehabilitated, what remains the compelling public-interest rationale for selling it?Assurance in focusA policy framed for one set of circumstances, it argued, cannot be mechanically carried forward after the underlying conditions have materially changed .The Forum said Parliament had closely scrutinised the proposed transformation of IDBI when its statutory structure was altered in 2003. The Standing Committee’s 46th Report had specifically examined Government ownership and recommended that its shareholding should not fall below 51 per cent, after which the then Union Finance Minister assured Parliament the threshold would be maintained.No ordinary statementSuch an assurance, the Forum said, could not be treated as an ordinary political statement. It was given during Parliamentary consideration of legislation that fundamentally altered the character of an institution created by Parliament. While acknowledging that a ministerial assurance may not carry the same juridical force as an explicit statutory prohibition, the Forum said Parliamentary government rests on ministerial accountability to House.Parliamentary scrutinyThe proposed divestment, under which the Government’s residual stake would fall to 15 per cent, makes the earlier Parliamentary scrutiny directly relevant, it said. The present Standing Committee therefore has a special institutional responsibility to determine whether the circumstances that led its predecessor to insist on majority Government ownership have genuinely disappeared, or whether the bank’s subsequent recovery has instead strengthened the case for retaining public control.The Forum said the earlier scrutiny could not be dismissed as historically exhausted when the very issue examined by the committee - loss of majority Government ownership - was now set to materialise .Any departure from the 2003 assurance, it argued, should at minimum be accompanied by disclosure of the original assurance; its status before the Committee on Government Assurances; the reasons for departing from it; an explanation of changed circumstances and fresh Parliamentary scrutiny. Published on August 27, 2026
