Govt using LIC to cover up its sins in the banking sector: Cong

The Congress today targeted the government over the of the Life Insurance Corporation board's decision to buy a majority stake in the ailing IDBI bank, saying by doing so the NDA dispensation wants to cover up its "sins in the banking sector" using hard-earned savings of 38 crore policy holders.

Hitting out at the government, Congress' communications convenor Priyanka Chaturvedi said squeezing the savings of the common people is the "sole motto" of the Modi government, alleging that it has been attacking the common people at multiple fronts.

"It has discovered a unique way to rub salt on the savings of LIC policy holders too by forcing LIC to buy stake in a loss making IDBI Bank, thereby essentially abusing the faith of the common people in LIC and burdening them with an estimated Rs 13,000 crore," a party statement quoting Chaturvedi said.

In this process, the Modi Govt is completely flouting the Banking Regulation Act, Insurance Regulatory Act, Insurance Act, Insurance Regulatory and Development Authority Act, SEBI Act and so on, the statement added.

The Insurance Regulatory and Development Authority of India (IRDAI) yesterday permitted Life Insurance Corporation (LIC) to increase the current stake from 10.82 per cent to 51 per cent in the IDBI Bank.

The IDBI Bank is the worst performing public sector Bank whose Q4 losses have swollen to Rs 5,663 crore and gross NPAs to a whopping Rs 55,588.26 crore. It has a bad loans ratio of close to 28 per cent, the statement added.

Chaturvedi added that the Modi government is hell bent to achieve this years' disinvestment target of Rs 80,000 crore and is using the LIC for IDBI Bank is the easiest option.

The Congress asked the government as to why was it "jeopardising" the savings of LIC holders by burdening them with Rs 13,000 crore bailout package of IDBI?