The Hindu : Tamil Nadu News : `Unrest over move to merge banks'

Online edition of India's National Newspaper
Saturday, Dec 18, 2004

Tamil Nadu

Tamil Nadu

`Unrest over move to merge banks'

By Our Special Correspondent

CHENNAI, DEC. 17. The Federation of Bank of India Officers' Associations has said that the talk of merger of the bank with the Union Bank of India has led to "emotional upheaval, concern and unrest" among the employees as also the bank's customers.

Unique strengths

In a statement, the general secretary, V. Eswaran, said the Bank of India, which will complete 100 years of service in September 2006, had unique strengths such as capital adequacy of 13.05 per cent against the statutory minimum of nine per cent, low non-performing assets (NPAs) of 4.05 per cent, a net profit of Rs 1,008 crores and a network of 2,574 branches, including 22 abroad, accounting for 20 per cent of its business.

The bank commanded "brand equity and sentimental value" to the employees and customers alike.

Both the Bank of India and the Union Bank of India had a large network of branches in Gujarat and Maharashtra, and merger would lead to shrinkage of branches, including those in other States, downsizing of the workforce (in the name of rationalisation) and reintroduction of the voluntary retirement scheme (VRS).

`Clash of cultures'

Mr. Eswaran, citing the opinion of experts, pointed out the risk posed by a "clash of cultures and systems" whenever two large organisations merged, and the threat this posed to the efficiency and morale of the merged entity and its staff.

He said the unions representing both the banks opposed any merger. They also planned agitations, including a strike, if an official announcement on merger was made.

"Their official nominees on the board shall express dissent over the proposal (for merger), if and when it is introduced and if the initiative for consolidation comes from the management," Mr. Eswaran said.

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