Foreign firms being allowed to acquire Indian banks imprudent, poses substantial risks: Congress

The remarks came in the wake of Emirates NBD Bank, the second largest in the UAE, expressing interest in acquiring a majority 60% stake in RBL Bank for Rs 26,853 crore.

New Delhi: Congress on Sunday said foreign firms are gradually being allowed to acquire Indian banks while describing it as posing "substantial risks" while recalling that Jan Sangh had criticised then Prime Minister Indira Gandhi for not nationalising foreign banks in July 1969.

The remarks came in the wake of Emirates NBD Bank, the second largest in the UAE, expressing interest in acquiring a majority 60 per cent stake in RBL Bank for Rs 26,853 crore. This is said to be the biggest ever financial sector deal in value terms.

Congress General Secretary (Communications) Jairam Ramesh said, "First, Laxmi Vilas Bank was acquired by Singapore's DBS Group. Second, Catholic Syrian Bank was acquired by Canada's Fairfax. Third, Japan's Sumitomo Mitsui Banking Corporation took over Yes Bank."

He said now comes the news of Dubai's Emirates NBD acquiring RBL Bank. India's first full privatisation of a public sector bank is expected to be completed in this financial year and this is the sale of IDBI Bank, he said.

"Foreign firms are gradually being allowed to acquire Indian banks. These imprudent moves pose substantial risks," he said.

Sharing a clipping of a news report, Ramesh added, "just as a matter of historical interest, the Jan Sangh had criticised Indira Gandhi for NOT nationalising foreign banks in July 1969. This is a news report of Dec 28, 1969, after the Jan Sangh's meeting in Patna the previous day."