Fact Check: Posts Viral Claiming Axis Bank, HDFC And ICICI Were PSUs Which Congress Privatised

Social media users claim that Axis Bank, HDFC, and ICICI bank were public sector banks that were later privatised. The Logical Indian Fact-Check team found the claim to be misleading.

India   |   25 March 2021 3:43 PM GMT / Updated : 2021-03-26T11:29:05+05:30
Writer : Yusha Rahman | Editor : Bharat Nayak | Creatives : Rajath
Fact Check: Posts Viral Claiming Axis Bank, HDFC And ICICI Were PSUs Which Congress Privatised

Image credit: India Today

Many social media users are sharing a post claiming that the ICICI bank, HDFC bank and Axis bank were all government banks earlier, which were later privatised when Late PV Narasimha Rao was Prime Minister and Manmohan Singh was the Finance Minister.

The post is being shared to portray that Congress also privatised many banks of India. This post is being shared in the context of Finance Minister Nirmala Sitharaman announcing the privatisation of two public sector banks, IDBI Bank, and the United Forum of Bank Unions, while announcing the Budget of 2021.

The post says, "A brilliant lie is spread that the Congress creates government banks and the Modi government sells them...Lets go back in history. Today, the three largest banks in the private sector, ie ICICI Bank HDFC Bank and Axis Bank, all three used to be government but Manmohan Singh, who was the Finance Minister in PV Narasimha Rao government, sold them.(these have eaten away into the business of Govt banks over the decades). ICIC's full name was Industrial Credit and Investment Corporation of India... It was a Government of India organization that used to give loans to big industries but in one stroke Finance Minister Manmohan Singh disinvested it and made it private and its name And ICICI Bank is done. Today, HDFC Bank, its full name was Housing Development Corporation of India, it used to be an organization of the Government of India which used to give home loans to the middle class people at cheap interest. Manmohan Singh, who was the finance minister in the Narasimha Rao government, said that the government's only job is to govern, not sell home loans. The statements of Manmohan Singh, in which he describes privatization as the most important step for development and says that the government's job is only to run the government, not to give a loan to run a bank is in Public domain. And in one stroke, Finance Minister Manmohan Singh sold HDFC Bank and it became a private sector bank. This is a very interesting story of Axis Bank. There used to be an organization of the Government of India, its name was Unit Trust of India. This institution was formed to promote small savings, that is, you could deposit small amounts in it. Manmohan Government, Finance Minister Manmohan Singh said in Narasimha Rao government. The government's job is not to run the scheme of chit fund and it was sold in one stroke, first it was named UTI Bank and later it was named Axis Bank."

A Facebook user, Rishi Bagree, shared the post.

A brilliant lie is spread that the Congress creates government banks and

the Modi government sells them...

Lets go...

Posted by Rishi Bagree on Thursday, 18 March 2021

The post was also shared by a Twitter user Mayank Jindal.

Another Facebook user, Rakessh Kumar, also shared the post.

हे राम !

A brilliant lie is spread that the Congress creates government banks and

the Modi government sells...

Posted by Rakessh Kumar on Sunday, 21 March 2021


ICICI, HDFC and Axis Bank were all once government banks that were later privatised.

Fact Check:

The Logical Indian checked for the history of each bank separately and found the claim to be misleading.


ICICI was formed in 1955 with the main objective to create a private sector development financial institution for providing medium-term and long-term project financing to Indian businesses. It was formed as an initiative of the World Bank, the Government of India and representatives of Indian industry. Until the 1980s, the bank's main purpose was to focus on giving financial aid and providing long-term funds to a variety of industrial projects. In the 1990s, ICICI bank expanded its business as a diversified financial services provider. It was in 1994 that ICICI bank was incorporated as a part of the ICICI group.

While various public sector institutions are stakeholders of ICICI, yet it is considered a private sector bank. A similar example is the IDBI bank. IDBI was earlier a private sector bank, but after Life Insurance Corporation of India acquired stakes in IDBI bank, it became a public sector bank. From January 21, 2019, IDBI Bank Limited was recategorized as a 'Private Sector Bank' for regulatory purposes by the Reserve Bank of India.

A loan document of the Asian Development Bank [ADB] published in November 1996 also mentions ICICI as a private sector bank.

Screenshot of ADB loan document.

In 2002, two subsidiaries of ICICI i.e., ICICI Personal Financial Services Limited and ICICI Capital Services Limited, were merged with ICICI bank. Hence, the claim that ICIC bank was earlier Public bank is fake.

HDFC Bank:

HDFC Bank was established to finance housing development in India and was known as Housing Development and Finance Corporation (HDFC). It is still India's largest housing finance corporation.

According to the history of HDFC, it was earlier set up by Hasmukh Parekh in 1977 without any financial assistance from the government with the intent of providing housing finances. In 1994, it received the approval to set up a private sector bank. In the year 1995, it received a banking license.

Boom Live contacted the spokesperson of HDFC, who said that 5% of the institution was owned by the International Finance Corporation (the financing arm of the World Bank Group), 5% by His Highness the Aga Khan and 5% by ICICI. The remaining 85% was publicly held (by shareholders). "HDFC had nothing to do with the government in terms of equity", he said.

An ADB's project completion report published in August 2003 also mentions HDFC as a private entity. The report says, "The Housing Development Finance Corporation Ltd. (HDFC) was established in 1977 as a public limited company to provide housing finance to individuals. As the first private HFC, its operations grew rapidly, and it continues to be the market leader in the retail housing finance sector despite the emergence of a number of HFCs."

Screenshot of ADB's project completion report.

Axis Bank:

The About Us section of Axis bank mentions that the bank is a private sector bank. The bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of India (SUUTI) (then known as Unit Trust of India), Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC), National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd and started operating in 1994.

In 2002, UTI disbanded into SUUTI and UTI mutual fund. In 2007, UTI was renamed Axis Bank, according to an article published by The Times Of India on July 31, 2007.

Hence, Axis Bank was never a public sector bank but always a private sector bank.

The claim was earlier debunked by Boom Live.

If you have any news that you believe needs to be fact-checked, please email us at factcheck@thelogicalindian.com or WhatsApp at 6364000343.

Also Read: Fact Check: Old Image Of Anti-France Rally Shared As Muslims Protesting Against Modi's Bangladesh Visit

Claim Review :  ICICI, HDFC and Axis Bank were all once government banks that were later privatised.
Claimed By :  Social Media
Fact Check :  Misleading
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Yusha Rahman

Yusha Rahman


Yusha, an engineer turned journalist with a core interest in sensible journalism. Since the time she worked in an MNC, she saw how fake news was rife to malign images of communities, leaders, etc. This encouraged her to give up her career in MNC and passionately work towards curbing fake news and propaganda.

Bharat Nayak

Bharat Nayak

Founding Editor - Special Project

As the founding editor, Bharat had been heading the newsroom during the formation years of the organization and worked towards editorial policies, conceptualizing and designing campaign strategies and collaborations. He believes that through the use of digital media, one could engage the millennial's in rational conversations about pertinent social issues, provoking them to think and bring a behavioral change accordingly.



Creative Producer

A free spirit who find meaning in life with the virtue of creativity and doing job par its excellence, animal lover and traveller by heart.

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