CPI(M) MP John Brittas warns Finance Minister Nirmala Sitharaman of growing foreign takeover in Indian banks, citing the CSB acquisition by Fairfax. He demands an urgent review of FDI norms to protect India’s financial sovereignty and national banking stability.
CPI(M) Rajya Sabha MP John Brittas has raised a strong alarm over what he describes as the rapid “foreignisation” of India’s banking sector, urging the Union Finance Minister Nirmala Sitharaman and the Reserve Bank of India (RBI) to initiate an urgent review of foreign direct investment (FDI) policies governing the sector. His concerns primarily centre around the takeover of the Catholic Syrian Bank (CSB) by the Canada-based Fairfax Group, which he believes signals a wider and more troubling trend of foreign dominance in Indian banking.
In a detailed letter to the Finance Minister and the RBI Governor, Brittas stated that the acquisition of CSB should be treated as a “test case” to understand the long-term implications of foreign equity control in India’s financial institutions. He warned that the development represents a potential reversal of the principles that guided India’s historic bank nationalisation process, which sought to secure domestic control over financial assets and ensure stability, inclusivity, and accountability.
According to Brittas, the dangers are no longer theoretical. He argued that the foreign takeover of CSB has been accompanied by a series of alarming developments—ranging from dilution of social banking responsibilities to the casualisation of the workforce. He noted that there has been a sharp decline in permanent employment within the bank, with increasing dependence on contractual and outsourced staff. This, he said, has led to job insecurity, stagnation of wage revisions, and a weakening of labour protections that have long been standard in the banking industry.
Brittas also highlighted that after foreign acquisition, CSB displayed a significant shift in its operational priorities. The bank, he claimed, has cut back on its essential role in social banking and financial inclusion, areas traditionally emphasised by Indian banks. Such trends, he contended, underscore the broader risks associated with permitting substantial foreign ownership in a sector so closely intertwined with public welfare and economic stability.
In his communication to the Finance Minister, Brittas recalled how India remained largely unaffected during the 2008 global financial crisis, unlike many Western economies. He attributed this relative immunity to India’s cautious approach and its deliberate insulation from aggressive foreign control over its banking institutions. “The resilience that India demonstrated during the global financial meltdown was the direct result of prudent and sovereign control over the banking system,” he wrote, stressing that such stability should not be taken for granted.
The CPI(M) MP pointed out that the takeover of CSB is not an isolated incident. He referred to recent developments involving several major private banks including Lakshmi Vilas Bank, Yes Bank, RBL Bank, ICICI Bank, HDFC Bank, Axis Bank, and others. These patterns, he argued, reflect a progressive shift that could eventually place key Indian financial institutions under substantial foreign influence, raising long-term concerns about economic independence and national security.
Brittas has demanded a comprehensive reassessment of the existing FDI norms in the banking sector, warning that unchecked foreign investment could erode India’s financial sovereignty. He urged the government to investigate not only the CSB acquisition but also the overall trend of consolidation and foreign capital infusion in private banks.
He stressed that the RBI must take a closer look at whether such takeovers comply with India’s national interests, social priorities, and labour welfare principles. “Banking cannot be treated merely as a profit-driven enterprise. It is a fundamental pillar of national development and public trust,” Brittas asserted.
The MP’s intervention comes amid rising debate over the role of foreign institutions in domestic financial sectors, particularly at a time when India is pushing to strengthen its banking architecture through digitisation, recapitalisation, and financial inclusion. His letter underscores a growing political and economic concern that the aggressive entry of foreign investors could gradually dilute India’s regulatory control and alter the character of its banking ecosystem.
As the conversation moves forward, stakeholders from across the political spectrum, labour unions, and banking experts are expected to weigh in on the issue. Whether the government undertakes a review of the FDI policies remains to be seen, but Brittas’ warning marks a significant moment in the discussion on preserving India’s financial autonomy and safeguarding the spirit of bank nationalisation.
