AIBEA says IDBI Bank is still a Public Sector Bank, Read letter!

AIBEA has addressed a letter to Dr. Soumya Kanti Ghosh, Part-time Member of the Prime Minister’s Economic Advisory Council and Group Chief Economic Advisor, State Bank of India, Corporate Centre, Mumbai. The All India Bank Employees’ Association (AIBEA), in its letter dated 8 November 2026, has raised objections to the classification of IDBI Bank as a private sector bank. It has argued that IDBI Bank continues to function as a Public Sector Bank for all practical purposes, despite the RBI classifying it as a private sector bank for regulatory purposes. Read what AIBEA said and share your opinions in the comments section.

Key Arguments Made by AIBEA

1. RBI’s classification was only for regulatory purposes: According to AIBEA, the RBI’s decision to classify IDBI Bank as a private sector bank was for regulatory purposes only and did not change its status for all other purposes.

2. IDBI Bank was created through an Act of Parliament: IDBI Bank was established under the IDBI (Transfer of Undertaking and Repeal) Act, 2003, which AIBEA says gives it a distinct public sector character.

3. Government had assured majority shareholding: AIBEA points out that the then Finance Minister, Jaswant Singh, had assured Parliament in December 2003 that the Government would maintain at least 51% shareholding in IDBI.

4. Government and LIC hold 94.72% stake: AIBEA states that LIC holds 49.24% and the Government of India holds 45.48% in IDBI Bank, together accounting for 94.72% of its shareholding. LIC is the promoter of IDBI Bank and exercises management control, while the Government of India acts as the co-promoter. Under Clause 116 of IDBI Bank’s Articles of Association, the Board includes two nominee directors of the Government of India.

5. Government infused ₹4,557 crore into IDBI Bank: AIBEA highlights that the Union Cabinet approved a capital infusion of ₹4,557 crore in September 2019, even after the RBI had classified the bank as a private sector bank.

6. IDBI Bank continues to receive government business: The Department of Financial Services (DFS), through its December 2019 communication, directed government departments and institutions to continue considering IDBI Bank for government business because of its direct and indirect government shareholding. The bank handles government banking transactions, treasury operations, pension disbursements and other government-related schemes, including Pradhan Mantri Jan Dhan Yojana.

7. IDBI Bank remains under the Central Vigilance Commission (CVC): AIBEA says that IDBI Bank continues to follow CVC guidelines relating to vigilance, anti-corruption measures and internal investigations. The Department of Financial Services considers IDBI Bank a Public Sector Bank for the purpose of appointing its Chief Vigilance Officer (CVO).

8. IDBI Bank follows the Government’s Official Language Policy: AIBEA points out that IDBI Bank continues to follow instructions issued by the Department of Official Language, Ministry of Home Affairs, including recruitment related to Rajbhasha posts.

9. IDBI Bank continues to come under the RTI Act: AIBEA says that IDBI Bank is covered under the Right to Information Act, 2005, and maintains dedicated RTI officers and submits periodic returns to the Central Information Commission.

10. Reservation policy is still being followed: IDBI Bank continues to implement reservation provisions in recruitment for SC, ST, OBC, EWS, Persons with Benchmark Disabilities and ex-servicemen.

11. IDBI Bank participates in parliamentary proceedings: AIBEA points out that IDBI Bank representatives participated in meetings of the Public Accounts Committee of Lok Sabha on banking sector reforms, along with representatives of other public sector banks.