Congress seeks JPC probe into IDBI Bank sale, alleges valuation irregularities

IDBI Bank, a former public sector lender, was sold to Fairfax Financial Holdings in a transaction that has drawn scrutiny from opposition parties and financial analysts. Critics argue that the price paid for the bank was lower than its true market value, potentially resulting in a loss of public assets. The Congress party has formally requested that a Joint Parliamentary Committee be set up to examine the details of the deal, including the methodology used to arrive at the valuation and the role of independent advisors.

In addition to the valuation concerns, the party has raised questions about the source of funds used by Fairfax to complete the purchase. Documents submitted to the parliamentary committee indicate that a portion of IDBI’s own capital may have been leveraged to fund the acquisition, a practice that could raise conflict‑of‑interest issues under existing banking regulations. Congress leaders have asked the Ministry of Finance to disclose all valuation reports, internal memos and board minutes related to the transaction, arguing that transparency is essential for public confidence in the banking sector.

The demand for a probe comes at a time when the government is promoting the privatization of several public sector banks to improve efficiency and capital adequacy. Supporters of the sale contend that the deal will bring fresh capital, modern technology and better governance to IDBI, helping it to compete more effectively. Opponents, however, warn that without a thorough review, the sale could set a precedent for undervaluing public assets in future privatizations. The outcome of any parliamentary inquiry could influence policy decisions on bank disinvestment and the broader approach to financial sector reforms.