To

The Hon’ble President of India

Rashtrapati Bhavan

New Delhi

 

Subject: Appeal to intervene constitutionally and advise reconsideration of the proposed strategic disinvestment and privatisation of IDBI Bank, in view of parliamentary assurances, constitutional principles, public ownership, social justice, national financial sovereignty and the Bank’s restored profitability

Respected Hon’ble President,

We, the undersigned citizens, employees, depositors, customers, trade unionists, pensioners, professionals and concerned members of civil society, respectfully submit this petition seeking your kind constitutional attention to the proposed strategic disinvestment and transfer of management control of IDBI Bank Ltd.

Our appeal is not based merely on an ideological preference for public ownership. It arises from serious questions relating to:

• The sanctity of assurances given to Parliament;
• The constitutional vision of social and economic justice;
• The principles embodied in Articles 14, 37, 38 and 39 of the Constitution;
• The impact on reservation and affirmative action;
• The protection of publicly accumulated assets;
• The implications of possible foreign controlling ownership;
• The future stability of the Bank;
• The policy contradiction with Atmanirbhar Bharat; and
• The absence of any compelling public-interest justification for selling a Bank that has returned to sustained profitability.

We therefore respectfully seek your intervention, within the constitutional framework, so that the Union Government may be advised to halt the proposed strategic disinvestment pending comprehensive parliamentary reconsideration and public scrutiny.

1. IDBI Was Created as an Instrument of National Development

The Industrial Development Bank of India was established in 1964 as part of independent India’s institutional architecture for planned industrialisation and economic self-reliance.

IDBI was not conceived as an ordinary commercial entity. It played a critical role in long-term industrial finance, infrastructure development and institution building.

Over the decades, it contributed to the creation and development of institutions that later became important pillars of India’s financial system.

The proposed transfer of controlling ownership of such an institution therefore raises questions far beyond an ordinary sale of shares.

It concerns the future ownership and direction of a strategic financial institution built over decades through public policy and public resources.

2. The Constitutional Vision Includes Economic Democracy

The Constitution of India does not view democracy merely as electoral democracy.

The Preamble promises social, economic and political justice.

Article 38 directs the State to promote a social order in which justice informs all institutions of national life and to reduce inequalities.

Article 39 directs State policy towards ensuring that material resources are used to subserve the common good and that the economic system does not result in concentration of wealth and means of production to the common detriment.

Article 37 declares the Directive Principles to be fundamental in the governance of the country.

The Constituent Assembly repeatedly discussed the need for economic democracy, recognising that political democracy cannot remain meaningful if economic power becomes excessively concentrated.

Banking is central to this constitutional concern because control over banking means influence over:

credit allocation;

• industrial development;
• agriculture;
• MSMEs;
• regional development;
• financial inclusion;
• employment;

and the deployment of people’s savings.

Therefore, the ownership and control of a major financial institution cannot be treated as constitutionally irrelevant.

 

3. Economic Policy Is Also Subject to Constitutional Accountability

The Government unquestionably enjoys wide discretion in economic policy.

However, executive economic decisions remain subject to constitutional principles, including the requirement that State action should not be arbitrary.

When a profitable strategic financial institution, rehabilitated with the support of public institutions, is proposed to be transferred into private or foreign control, the Government must demonstrate:

• a clear public purpose;
• a rational economic justification;
• transparent valuation;
• protection of stakeholders;
• consistency with declared national policy;
• and safeguards against long-term harm to public interest.

The question is therefore not simply whether the Government possesses the legal power to sell shares.

The deeper constitutional question is:

Whether the exercise of that power is reasoned, non-arbitrary, transparent and demonstrably in the public interest.

4. Parliament Was Given a Specific Assurance Regarding 51% Government Ownership

When Parliament considered the legislation transforming IDBI from a statutory development financial institution into a banking company, serious concerns were expressed regarding the preservation of its public-sector character.

The Parliamentary Standing Committee on Finance examined the matter and recommended that Government shareholding in IDBI should not fall below 51%.

During parliamentary consideration of the legislation, the then Union Finance Minister gave an assurance in both Houses that the Government would continue to maintain at least 51% equity in IDBI.

This assurance was not an informal political statement.

It was given in Parliament during consideration of legislation that fundamentally altered IDBI’s institutional character.

This creates a serious question of parliamentary accountability.

If the Government now considers departure from that assurance necessary, democratic propriety demands that the matter be placed before Parliament again with full reasons and contemporary justification.

An executive disinvestment decision should not silently erase a solemn parliamentary assurance.

 

5. Parliamentary Assurance and Legitimate Expectation

We recognise that a parliamentary assurance may not have the same legal status as an express statutory prohibition.

However, the combination of:

• The Standing Committee recommendation;
• The Finance Minister’s assurance in both Houses;
• The subsequent institutional arrangements;
• Tecades of public ownership; and
• The expectations created among employees, depositors and citizens cannot be treated as irrelevant.

At the very least, these circumstances create a compelling case for heightened transparency, procedural fairness and reasoned justification before the Government abandons the earlier commitment.

The authority and dignity of Parliament require that such an assurance be dealt with openly, not bypassed through administrative action.

6. The Original Economic Justification for Privatisation Has Materially Changed

The case for privatisation was developed when IDBI Bank was facing serious financial distress.

The Bank had accumulated stressed corporate loans, suffered losses and was placed under Prompt Corrective Action.

Public institutions then supported its rehabilitation.

LIC assumed a major ownership role.

The Bank underwent restructuring.

Employees contributed significantly to its recovery.

The balance sheet was repaired.

The Bank subsequently returned to sustained profitability.

This materially changes the factual foundation of the privatisation policy.

A policy framed when an institution was distressed cannot be mechanically continued after the institution has become profitable and commercially viable without fresh justification.

If the Bank has recovered, the Government must explain why privatisation remains necessary.

Otherwise, the policy creates the deeply troubling impression of:

socialising losses and privatising profits.

 

7. Public Institutions Bore the Risk — Why Should Private Capital Receive the Reward?

When IDBI was in difficulty, the public sector absorbed the risk.

LIC and other public institutions stood behind the Bank.

Employees endured restructuring.

Depositors retained confidence.

The institution recovered.

If, after this recovery, controlling ownership is transferred to private capital, the public sector bears the cost of rehabilitation while the upside of recovery is transferred elsewhere.

This raises a fundamental issue of distributive justice:

If public resources carried the risk, why should the public not continue to receive the benefits of recovery?

The question becomes even more serious if the ultimate beneficiary of the transfer is a foreign-controlled entity.

8. A Profitable Bank Should Not Be Sold Without Demonstrating Compelling Public Interest

IDBI today possesses:

• - an established banking licence;
• - a nationwide branch network;
• - a substantial deposit franchise;
• - a large customer base;
• - technology infrastructure;
• - trained human resources;
• - a valuable brand;
• - institutional relationships;
• - significant immovable properties; and
• - decades of accumulated goodwill.

A profitable financial institution can generate dividends and economic value year after year.

Selling such an institution converts a continuing public asset into a one-time fiscal receipt.

Before proceeding, the Government must demonstrate what measurable public benefit privatisation will achieve that continued public ownership cannot.

 

9. Foreign Controlling Ownership Raises Questions of Financial Sovereignty

The possibility that controlling ownership may pass to a foreign financial entity fundamentally alters the nature of the issue.

Finance is not an ordinary commodity.

Banks mobilise the savings of citizens and determine where credit is deployed.

Control over a large banking institution therefore carries substantial influence over the direction of economic activity.

This is why the issue is no longer merely:

public ownership versus private ownership.

It is potentially:

national control versus foreign control over a strategic financial institution.

India participates in a global economy and foreign investment can make a constructive contribution.

But there is a fundamental distinction between foreign investment in India and foreign controlling ownership over an institution that allocates Indian household savings.

10. Atmanirbhar Bharat Requires Atmanirbhar Finance

The Government has repeatedly declared the objective of Atmanirbhar Bharat.

But economic self-reliance cannot be confined to manufacturing or import substitution.

It requires domestic strategic capacity in:

• banking;
• finance;
• payments;
• technology;
• energy;
• telecommunications;
• infrastructure;
• defence;
• agriculture;
• and data.

Finance supports all these sectors.

Therefore, transferring controlling ownership of a major Indian financial institution to foreign capital raises an obvious policy contradiction.

Atmanirbhar Bharat cannot be complete without financial sovereignty.

11. Historical Experience Warns Against Excessive External Control Over Strategic Finance

India’s colonial experience demonstrated that political subordination was accompanied by economic domination through control over trade, finance, shipping, insurance and capital.

Modern foreign investment is obviously not identical to colonial rule.

However, history teaches an important lesson:

political sovereignty can be weakened when strategic economic institutions progressively move beyond meaningful domestic control.

Twenty-first-century economic dependency does not require colonial administration.

It can arise through concentrated control over finance, technology, data and infrastructure.

This is why foreign controlling ownership of a major banking institution deserves the highest level of public and parliamentary scrutiny.

 

12. Banking Operates Primarily With People’s Money

Banks do not conduct business predominantly with shareholders’ funds.

Their principal economic resource is the money entrusted to them by depositors.

Workers deposit salaries.

Pensioners deposit retirement savings.

Farmers deposit agricultural income.

Small businesses deposit working capital.

Families deposit lifelong savings.

Banks then deploy these resources through credit.

 

Therefore, control over a large bank means substantial influence over the deployment of society’s accumulated savings.

People’s money must remain aligned with people’s welfare and national development.

13. IDBI’s Huge Property Portfolio Requires Independent Valuation

IDBI has accumulated extensive immovable properties over more than six decades.

These may include:

• land;
• office buildings;
• residential premises;
• training establishments;
• and properties in prime commercial locations.

Many were acquired decades ago at historical prices.

Their present market value may be vastly higher than their recorded book value.

Accordingly, IDBI cannot be valued merely through:

• market capitalisation;
• share price;
• book value;
• net worth;
• profit multiples;
• or banking business.

There must be an independent and transparent valuation of the Bank’s significant immovable properties.

14. Public Assets Must Not Become a Hidden Windfall for the Purchaser

Without proper asset valuation, a purchaser could acquire not merely a bank but also a substantial portfolio of undervalued properties.

If these properties are later:

• sold;
• redeveloped;
• leased;
• or otherwise monetised,

the purchaser could potentially recover a significant portion of the acquisition cost through assets accumulated during public ownership.

This creates a serious risk of private appropriation of publicly accumulated wealth.

A strategic bank cannot be transferred as though it were a discounted real-estate portfolio with a banking licence attached.

15. Property-by-Property Legal Due Diligence Is Essential

Some legacy properties may have been acquired under laws or arrangements involving a public purpose.

The Government must therefore conduct property-by-property legal due diligence to determine:

• How each major property was acquired;
• Under what law;
• For what purpose;
• Whether acquisition conditions survive;
• Whether change of control affects those conditions;
• Whether any reversionary rights exist; and
• Whether any State Government or original owner retains legally cognisable rights.

Such legal issues must be resolved before control of the Bank is transferred.

 

16. Asset Stripping and Post-Privatisation Monetisation Must Be Prevented

The strategic disinvestment framework must contain legally enforceable safeguards against asset stripping.

At a minimum, there should be:

• Independent valuation of major properties;
• Disclosure of valuation methodology;
• Restrictions on disposal of significant legacy assets;
• Regulatory approval for major monetisation;
• Safeguards ensuring that monetisation proceeds remain within the Bank;
• Prohibition against extraction of asset-sale proceeds for the benefit of controlling shareholders;
• and continuing regulatory oversight.

 

The bidder must be acquiring IDBI to develop banking business, not merely to unlock real-estate value.

 

17. The Lock-in Period Does Not Protect the Bank Forever

A lock-in period is temporary.

Once it expires, the strategic investor may, subject to law and regulatory permission:

• reduce its holding;
• bring in another investor;
• restructure control;
• or ultimately exit.

This raises an important question:

Who will own IDBI ten or fifteen years from now?

A strategic financial institution holding the savings of millions of citizens requires long-term ownership stability.

Repeated changes of control can create uncertainty for:

• depositors;
• employees;
• customers;
• branch strategy;
• lending priorities;
• technology;
• and the Bank’s institutional direction.

18. There Is a Real Risk of Privatisation Followed by Monetisation and Exit

The country must guard against a possible sequence in which:

1. A private or foreign investor acquires control;
2. Valuable public-era assets are monetised;
3. Business operations are restructured;
4. Significant economic value is extracted;
5. The lock-in period expires; and
6. The investor later dilutes or exits.

This is not an allegation against any particular bidder.

It is a structural policy risk that must be anticipated before the transaction becomes irreversible.

19. Reservation and Social Justice Could Be Seriously Affected

Public-sector institutions have historically provided one of the most important channels for implementing reservation and affirmative-action policies.

IDBI has employed thousands of persons belonging to SC, ST, OBC, EWS, PwD and other eligible categories.

The impact of privatisation is therefore not confined to existing employees.

It concerns future generations.

If IDBI moves outside the public-sector reservation framework, future recruitment opportunities for historically disadvantaged sections may shrink permanently.

Social justice must not become collateral damage of disinvestment.

 

20. Parliamentary Committees Have Already Treated IDBI as a Socially Accountable Institution

The Parliamentary Committee on the Welfare of Scheduled Castes and Scheduled Tribes has examined:

• SC/ST representation in IDBI;
• grievance redressal;
• and credit facilities extended to SC/ST communities.

This demonstrates that Parliament has historically regarded IDBI as an institution carrying social obligations.

Before privatisation changes that framework, the implications should be examined by the relevant parliamentary committees and constitutional commissions.

 

21. Contractual Assurances in a Share Purchase Agreement Are Not Enough

The Government may provide certain protections in the Share Purchase Agreement.

But contractual protections cannot fully substitute for public-law and constitutional safeguards.

A contract may not permanently ensure:

• reservation in future recruitment;
• continuation of rural branches;
• long-term developmental lending;
• protection against subsequent ownership changes;
• or permanent restrictions on asset monetisation.

The State’s responsibility therefore cannot end with the signing of an SPA.

 

22. A Comprehensive White Paper Must Be Placed Before Parliament

Before any final transfer of management control, the Union Government should place a comprehensive White Paper on IDBI Bank before both Houses of Parliament.

It should include:

1. The legislative history of IDBI;
2. The Standing Committee on Finance recommendations;
3. The parliamentary assurances given in 2003;
4. The status of those assurances before the Committee on Government Assurances;
5. The legal basis for departing from the earlier 51% public-ownership commitment;
6. Details of public-sector financial support used in IDBI’s rehabilitation;
7. LIC’s investment and financial exposure;
8. IDBI’s present and projected profitability;
9. Acomprehensive independent valuation of significant immovable assets;
10. Property-title and public-purpose acquisition audits;
11. The impact of privatisation on SC/ST/OBC/EWS/PwD reservation and future recruitment;
12. The views of relevant parliamentary committees;
13. The implications of foreign controlling ownership;
14. The precise lock-in and future exit framework;
15. Safeguards against asset stripping and monetisation;
16. The likely impact on employees, depositors and customers;
17. The effect on financial inclusion and priority-sector lending; and
18. A clear statement of the measurable public interest that privatisation is expected to achieve.

 

23. The Government Must Answer Fundamental Questions Before Proceeding

Before any irreversible transaction, the people of India are entitled to answers to the following questions:

1. Why should IDBI Bank be privatised when it has returned to sustained profitability?
2. What economic objective cannot be achieved under continued public ownership?
3. What is the present status of the parliamentary assurance regarding 51% Government ownership?
4. Was that assurance formally modified, withdrawn or discharged through the appropriate parliamentary process?
5. What happened to the Standing Committee on Finance recommendation regarding minimum Government ownership?
6. Why has Parliament not been asked to reconsider the issue?
7. How much public money and LIC resources contributed to IDBI’s rehabilitation?
8. Why should the public sector bear the risk while private capital receives the reward?
9. What is the independently assessed market value of IDBI’s properties?
10. Have those assets been fully incorporated in the transaction valuation?
11. What safeguards exist against post-sale asset stripping?
12. What happens after the strategic investor’s lock-in period expires?
13. Can the investor ultimately exit?
14. Who may control the Bank thereafter?
15. What will be the impact on reservation and future employment opportunities for disadvantaged communities?
16. How is foreign controlling ownership consistent with Atmanirbhar Bharat?
17. What safeguards exist for financial inclusion, rural banking and priority-sector obligations?

And above all:

What compelling and demonstrable public interest requires the privatisation of a profitable, rehabilitated and strategically important financial institution?

 

OUR PRAYER

In view of the above, we, the undersigned, most respectfully request the Hon’ble President of India, within the framework of the Constitution, to consider taking such appropriate steps as may be constitutionally permissible so that:

1. The proposed strategic disinvestment and transfer of management control of IDBI Bank is kept in abeyance pending comprehensive review.
2. The Union Government is advised to place a detailed White Paper on IDBI Bank before both Houses of Parliament.
3. The parliamentary assurance regarding minimum Government ownership and the recommendations of the Standing Committee on Finance are formally revisited before any irreversible decision is taken.
4. The matter is referred for appropriate scrutiny by the relevant Parliamentary Committees, including the Committee on Finance, Committee on Government Assurances and Committee on the Welfare of Scheduled Castes and Scheduled Tribes.
5. The implications of privatisation for reservation, social justice and future employment opportunities for SC, ST, OBC, EWS and PwD communities are comprehensively assessed before transfer of ownership.
6. An independent valuation of IDBI Bank’s tangible and intangible assets, including all significant immovable properties, is undertaken and placed in the public domain to the extent legally permissible.
7. Property-by-property legal due diligence is carried out in respect of legacy properties acquired for public purposes.
8. Binding safeguards against asset stripping, post-privatisation monetisation and extraction of legacy public wealth are prescribed before any transaction is concluded.
9. The long-term ownership structure, lock-in period, exit conditions and safeguards against repeated changes in controlling ownership are disclosed and debated.
10. The implications of possible foreign controlling ownership for national financial sovereignty and Atmanirbhar Bharat are examined at the highest policy level.
11. The Government demonstrates, transparently and before Parliament, the specific public interest that requires privatisation of IDBI Bank despite its restored profitability.
12. 12. Until such scrutiny is completed, IDBI Bank’s public-sector character is preserved.

 

WHY THIS PETITION MATTERS

IDBI is not merely a balance sheet.

It represents:

• six decades of public institution-building;
• publicly accumulated wealth;
• national financial capacity;
• the savings and trust of citizens;
• employment and social-justice opportunities;
• and an important part of India’s developmental banking history.

The proposed purchaser would acquire far more than shares.

It would acquire a profitable banking institution, a nationwide franchise, customers, deposits, technology, brand value, trained employees and valuable properties accumulated over generations.

Such an institution cannot be transferred solely on the logic of the highest bid.

Nor can the country permit a situation where publicly accumulated assets are monetised for private gain and the controlling investor later exits after the expiry of contractual restrictions.

Public policy must protect IDBI not merely on the day of sale, but for decades thereafter.