The Ministry of Finance issued a clarification addressing recent media reports regarding legislative developments concerning the government's shareholding in IDBI Bank. The clarification specifically references the IDBI (Repeal) Act, 2003, noting that during parliamentary debates on the Union Budget 2003, an amendment seeking to restrict dilution of the government's stake was moved but ultimately rejected and did not form part of the enacted legislation.
The matter was subsequently examined by the Delhi High Court in All India IDBI Officers' Association v. Union of India & Others, decided on 17 December 2018. The court dismissed the writ petition and specifically adjudicated in paragraphs 41 and 42 that statements made before Parliament 15 years earlier in legislative debates would not preclude the Central Government from diluting its stake in IDBI Ltd. The court emphasized that the enacted legislation contained no provision restricting government stake reduction and that principles of promissory estoppel were wholly inapplicable in this context.
The government's policy towards transformation and strategic disinvestment of IDBI Bank was reiterated in successive Union Budget speeches. In the 2016-17 budget speech, then Finance Minister Arun Jaitley stated that the process of transformation of IDBI Bank had already started and the government would consider reducing its stake to below 50%. In the 2021-22 budget speech, then Finance Minister Nirmala Sitharaman included IDBI Bank among transactions planned for completion in 2021-22, alongside the privatization of two other public sector banks and one general insurance company.
The collective evidence from legislative history, judicial pronouncement, and successive budget speeches demonstrates the evolution of the government's policy towards strategic disinvestment of IDBI Bank. The 2018 Delhi High Court judgment clarifies that the doctrine of promissory estoppel cannot be invoked based on parliamentary debate statements to restrict the government's power to dilute its shareholding.