Sitharaman accuses Congress of using banks as 'personal entities'

Finance Minister Nirmala Sitharaman on Friday criticized the Congress party and the previous UPA administration for their approach to banking sector governance, claiming they treated financial institutions as "personal entities" and coerced bank officials into compromising lending standards. In a statement responding to senior Congress leader Rahul Gandhi's comments on IDBI Bank, Sitharaman alleged the practice involved pressuring employees to extend loans at political behest, sidestepping established prudence criteria.

Sitharaman cited historical precedents to support her assertions, including the removal of SBI Chairman R K Talwar in 1976 under Indira Gandhi's tenure. She alleged Talwar was removed after refusing to relax lending norms for a company connected to Sanjay Gandhi, then a prominent political figure.

Addressing the current state of IDBI Bank, Sitharaman stated the institution was inherited in deteriorating financial condition. She attributed this to forced lending by IDBI to large business conglomerates with close ties to Congress leadership, naming Videocon, Winsome, ABG Shipyard, and Kingfisher among the beneficiaries. According to the Finance Minister, many of these loans subsequently turned into non-performing assets, contributing to the bank's weakened position.

The remarks represent an escalation in the government's defense of its divestment strategy for IDBI Bank, framing the current remedial measures as necessary corrections to legacy governance issues.