IDBI Bank employees to go on strike on Aug 30 against 51% stake sale to LIC

Other Bank employees to hold protest, agitations and finally a strike against Government decision

Employees of IDBI across the country are planning to go on strike on August 30 to pressurise the government not to privatise IDBI Bank. All India Bank Employees will be supporting IDBI Bank employees through agitations and protests and it will be followed by a strike, threatened All India Bank Employees Association.

The decision was taken at a meeting of the representatives of All India Bank Employees Association (AIBEA), All India Bank Officers' Association, All India IDB Employees' Association, All India IDBI Officers' Association at Chennai on Tuesday.

The Associations want the government to stop privatisation of IDBI Bank, government should keep its assurance to the Parliament and implement Clause 4 of the Articles of Association of IDBI Bank by maintaining minimum 51 per cent equity in the Bank and take stringent measures to recover bad loans.

C H Venkatachalam, general secretary, AIBEA and members of other Associations have said that the bad loans in IDBI Bank has gone upto Rs 550 billion, instead of taking stringent measures to recover these bad loans given to big corporate houses, the government is going back on its assurance given to the Parliament to maintain 51 per cent of the Bank's capital and trying to hand over the Bank to LIC and opening the gateway for privatisation of the Bank.

Clause 4 of the Articles of Association of IDBI Bank provides that Central government will maintain 51% of the Equity at all times. (Clause 4 : The Central Government, being a shareholder of the Company, shall at all times maintain not less than fifty-one per cent of the issued capital of the Company), they noted.

But by allowing LIC to acquire 51% of the equity, government's capital will come down to around 43 per cent. Thus even the Bank's own Articles of Association is being violated, they alleged.

The main problem in IDBI Bank is the growing bad loans of the big corporate and business houses. Because these huge bad loans are not being recovered, rather all types of concessions are being given, the profits earned by the Bank are going towards making provisions for these bad loans, they added.

In the last seven years from 2012 to 2018, Rs 242.26 billion of loans of the big borrowers have been written off by the Bank. When the entire profit of the Bank is going towards provisions for bad loans, the Bank is suffering from loss, inadequate capital, etc. The government should take tough measures to recover the bad loans and in the meantime, extend capital support as assured to the Parliament, said the Associations.

They added, "instead, the government is deciding to reduce its equity to less than 51 per cent in flagrant violation of their own commitment. LIC is being allowed to acquire majority equity of the Bank. This is surely the gateway to ultimately privatise the Bank".

On this backdrop it was decided to launch series of agitation programmes starting August 1, to save the Bank from privatisation and safeguard the jobs, job security and other interests of the employees and officers, said Venkatachalam.