New Delhi: Communist Party of India (Marxist) member of parliament, John Brittas, wrote on X today that he has written to Union finance minister Nirmala Sitharaman against the growing "foreignisation" of Indian Banking.

In his letter, Brittas upheld the situation of the century-old Catholic Syrian Bank, 51% of whose equity was allowed to be acquired by a Canada-based investor.

This situation has led to permanent job collapses, surges in contract labour, denial of wage revisions, and the dilution of social banking, Brittas has noted, urging for an immediate review of this trajectory.

His full letter is produced below.

§

Smt Nirmala Sitharaman
Hon'ble Minister of Finance and Corporate Affairs
Government of India

Respected Smt Nirmala Sitharaman Ji,

Sub: Acquisition of Indian banks by foreign entities and its implications in the banking sector - Catholic Syrian Bank - reg:

I trust this letter finds your good self in good health and high spirits.

I write this letter to draw your kind attention to certain deeply disquieting developments concerning the Catholic Syrian Bank (CSB), and to the larger issue of India's financial sovereignty in the context of the growing trend of foreign acquisitions in the Indian banking sector.

The Catholic Syrian Bank, founded in 1920 at Thrissur, Kerala, has for a century embodied the spirit of indigenous enterprise and social banking. It stood as an emblem of local capital, community trust, and the national banking ethos. However, in 2018, for the first time in Indian banking history, the Reserve Bank of India and the Central Government permitted 51% of the equity of an Indian bank to be acquired by a single foreign investor - the Canada-based Fairfax Group through its Mauritius holding company.

It is noteworthy that in 2007 the RBI had directed Thailand-based NRI businessman Mr. Surachan Chawla to reduce his equity holding in the same CSB to below 10%, recognising the regulatory necessity of preventing excessive control in a deposit-taking institution. Yet, in 2018, the same regulatory framework permitted a majority foreign takeover, effectively transferring control of a century-old Indian financial institution into foreign hands.

Recent developments in the banking sector reflect a worrying pattern: Lakshmi Vilas Bank was acquired by Singapore's DBS Group in 2020; Japan's Sumitomo Mitsui Banking Corporation (SMBC) has, in 2025, acquired 24.22% of Yes Bank, becoming its largest shareholder; and Dubai-based Emirates NBD Bank recently announced a $3 billion deal to purchase of 60% stake in RBL Bank. There are reports that the Fairfax Group is now exploring the acquisition of IDBI Bank. The prospects of foreign-controlled institutions acquiring Banks, including government or PSU controlled banks, are deeply alarming from the standpoint of economic sovereignty and regulatory prudence.

The story doesn't end there. Many of India's major private sector banks like ICICI, HDFC or Axis Bank have now foreign shareholdings at or around 50 percent. While these stakes are held by multiple entities, they collectively reflect a gradual "foreignisation" of Indian banks – a quiet yet profound 180-degree reversal of the bank nationalisation drive that reshaped India's financial architecture in the public interest – cloaked in technical jargon that masks the reality of this significant shift.

During the 2008 global financial crisis due to subprime mortgage crisis, complex and opaque financial products, excessive leverage, etc. triggered by the collapse of Lehman Brothers, the Indian banking system remained largely unscathed precisely because it was insulated from excessive foreign control and speculative exposure. That very insulation is now being progressively weakened by the growing foreignisation of our banking system. Sudden capital flight by foreign financial institutions, through the hasty withdrawal of banking investment capital from emerging economies during such international crises, exposes those economies to the danger of sudden shortage of banking capital.

When the performance of an Indian bank after its transition into foreign control is examined, with CSB taken as the illustrative case, the emerging picture is deeply disturbing. In 2015, CSB had 2,906 permanent employees. That number of permanent IBA employees has now reportedly plummeted to 906, while the number of contractual/CIC employees has surged. In the last nine years, it is understood that not a single regular appointment has been made. This reduction in permanent staff is not merely the result of natural attrition. Numerous employees were reportedly coerced into resignation owing to the pressure of disciplinary proceedings, arbitrary transfers, punitive measures, workplace pressure, etc., replacing them with contract/CTC staff lacking job security, statutory protection, and collective bargaining rights.

Contract/CTC staff have no uniform service conditions. They can be hired or terminated at will.

Their appointments are made through individual negotiations, resulting in arbitrary disparities where employees holding identical positions draw different pay packages. It is learnt that the average monthly remuneration of a CTC customer relation officer in CSB is around Rs. 20,000/-, whereas the starting salary of a permanent clerical-cadre employee would be around Rs. 40,000/--They are reportedly not entitled to annual increments, dearness allowance, or other statutory benefits.

After coming under foreign control, CSB has also decided to reduce the retirement age of its officers from 60 to 58 years in 2019, in contravention of the industry standard retirement age of 60 years. Besides, while the rest of the Indian banking industry has implemented the 11t and 12t BPS (effective from 2017 and 2022 respectively), CSB regular employees reportedly continue to receive salaries under the 10th BPS. Their basic pay remains frozen at 2012 levels. In contrast, the remuneration of top executive cadre has risen exponentially. The Managing Director, who was offered 36 lakh per annum along with other perquisites in 2016, reportedly drew as much as 3.03 crore by 2020-21. Several other senior executives are stated to be receiving annual compensation
exceeding One crore.

Once a people's bank serving small borrowers, farmers, and entrepreneurs, CSB has now shifted its focus. Agricultural, educational, housing, and small business loans, have been significantly reduced. At the same time, the bank has massively increased its exposure to the corporate sector. Even to open a savings account, the Bank now reportedly insists on a minimum initial deposit of Rs. 10,000/-.

It is therefore imperative to ask whether India's regulatory architecture can countenance a model where foreign ownership transforms indigenous community banks into profit-driven entities detached from their social purpose and developmental obligations and eroding employee rights.

India's cautious approach to foreign equity in banking was designed to prevent foreign entities from gaining effective control over deposit-taking institutions vital to national economic stability.

The silent dilution of these safeguards risks exposing Indian depositors to speculative vulnerabilities, weakens domestic credit flow to marginal sectors, and gives foreign players leverage over India's financial system.

In view of the foregoing, I most earnestly seek your good self's kind intervention for a comprehensive review of the FDI approval framework in the banking sector, to safeguard national control over banking institutions, to ensure CSB employees receive their rightful BPS-linked pay revisions with due protection of their service conditions, and to have the labour practices and corporate governance framework of CSB analysed in detail as a test case to assess the real impact of foreign equity control.

Thanking you.
Yours faithfully,
John Brittas

The Wire is now on WhatsApp. Follow our channel for sharp analysis and opinions on the latest developments.