LIC-IDBI deal: AIBEA expresses strong protest over Cabinet nod
Hyderabad,August 2 (UNI) All India Bank Employees’ Association (AIBEA) and All India Bank Officers’ Association (AIBOA) on Thursday expressed their strong protest against the Centre over giving approval to proposal of Life Insurance Corporation of India (LIC) to acquire 51 per cent stake in IDBI Bank.
‘We express our strong protest against the decision and urge for reconsideration’, AIBEA General Secretary Ch Venkatachalam and AIBOA General Secretary S Nagarajan said in a letter to Union
Interim Finance Minister Piyush Goyal.
They said, ‘consequently this will reduce the capital share of the Government in IDBI Bank to around 43 per cent. When IDBI was converted as IDBI Bank, the Government in Parliament said at all times they would hold a minimum of 51 per cent of the capital in IDBI Bank. Accordingly this was duly incorporated in the Articles of Association of IDBI Bank which provides that Government will maintain 51 per cent of the Equity at all times’, the Associations General Secretaries added.
Clause 4 said 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.
Venkatachalam and Nagarajan said ‘while we welcome the contribution of LIC into the capital of IDBI Bank, you will appreciate that it cannot be allowed to hold 51 per cent because this would reduce the Government’s share to less than 51 per cent which would go against the Articles of Association of the Bank and also the solemn assurance to the Parliament made in 2003 during the then BJP-led NDA government headed by Prime Minister Atal Bihari Vajpayee’.
The top union leaders said the need for additional capital for the Bank arises out of its huge bad loans and hence urgent measures has to be taken to recover the bad loans, which alone would address the issue of capital constraints of the Bank and result in generation of internal capital in the Bank.
‘We strongly urge upon the Government to take tough measures to recover the bad loans in the Bank,” they said.
“Since allowing a situation where the Government’s capital shareholding in the Bank would come down to less than 51 per cent which would have its implications on the public sector character of the Bank, the Government should reconsider the decision and not allow its shareholding to be reduced to less than 51 per cent,” they maintained.