By Express News Service
NEW DELHI: The Congress and the Left criticised the government's move to buy stake in the IDBI Bank asking why was a government insurer bailing out a defaulter bank at a cost of Rs 13,000 crore.
The opposition attack came after reports that Insurance Regulatory and Development Authority of India (IRDAI) board approved Life Insurance Corporation's investment in IDBI Bank, allowing LIC to own up to 51 percent in the beleaguered lender.
"As per law LIC canot invest more than 15 percent in IDBI," Congress spokesperson Priyanka Chaturvedi said.
"As the majority owner of the bank, LIC will have to keep infusing capital into the bank, to keep it going, in the years to come. And this is where common people (38 Cr LIC policy holders) shall feel the burden," party media panelist Gourav Vallabh said.
The Congress leaders said IDBI Bank is the worst performing public sector bank whose fourth quarter losses have swollen to Rs 5,663 Crore, gross NPA's to a whopping Rs 55,588.26 Cr and it had bad loans ratio of close to 28 percent.
CPI-M leader Sitaram Yechury urged the government to stop this loot. "LIC is the repository of people's savings in the form of insurance policies.
Using this capital to bailout the worst defaulter bank is tantamount to public loot of people's savings," Yechury said, adding that "LIC is not supposed to be in banking. It is being forced by suddenly changing rules. Regulatory mechanism being destroyed by Modi government so that defaulters don't have to repay. What is going on."
Both the Congress and the CPI-M accused the government of being pro-rich. "Bailing out rich defaulters, by diverting peoples' money. LIC is public money. Why no recovery of loans from rich defaulters? Cronyism of the worst kind by this Modi govt. Rich can loot and scoot, the common Indian will pay back their loans," said Yechury.
"Squeezing the hard earned savings of the common people is the sole motto of the Modi government," Chaturvedi added.
