Rukmani Vishwanath

Mumbai, July 29

THE merger of IDBI Bank with the Industrial Development Bank of India spurred stock prices of both the entities on the bourses.

IDBI Bank shares touched the upper circuit in the National Stock Exchange at Rs 50.80 on Thursday, up 19.93 per cent from its previous closing, while volumes traded soared to 12.82 lakhs.

The shares of IDBI were also propelled to close 6.27 per cent higher in the NSE at Rs 66.95 with volumes of 2.08 crore shares.

For some IDBI Bank officials, the announcement of the bank' decision to merge with the Industrial Development Bank of India brought with it a sense of déjà vu.

This time around, however, it seems that the bank's employees too may have given the merger proposal their blessing. In fact, many were pleased to see the value of their stock options enhanced with the bull-run in the market today.

Around the same time last year, talks of a possible merger between the two entities resulted in the exit of many top-level executives of the bank.

Among the various reasons ascribed for the `exodus' of employees then were the looming uncertainties about the changes in the bank's management structure post-merger, coupled with impending challenges of integrating the public and private sector cultures.

In August 2003, many senior IDBI Bank executives put in their papers, including Mr Anil Kumar, head of cash management service operations; Mr Ravi Nair, head of Internet banking and Ms Aditi Pundale, head of call centre, and the Head of product and sales, Mr Anil K Sachidanand.

Just prior to their resignations, two other key executives, the bank's human resources head, Ms Ulhas Deshpande and head of operations and retail assets Mr Kumar Subramanian had resigned.

Around the same time the Bank's previous Managing Director, Mr Gunit Chadha, left the bank to join Deutsche Bank. In October 2003, Mr Ajay Bimbet, the bank's senior most executive and acting CEO, resigned to join Abu Dhabi Commercial Bank (ADCB).

According to an ex-senior IDBI Bank official, who spoke under the condition of anonymity, the merger has every ikelihood of going through without much protest this time around. "Those people who did not want to stay in the case of a merger have all already quit and gone. The ones who stayed back had already reconciled to the idea that a merger may be impending. In the past one and a half years, around 40-50 key people at different levels have quit the bank," he said.

Senior officials with IDBI Bank confide that they are bullish on the merger.

"IDBI is well on its way to cleaning up its balance sheet with the Rs 9,000 crore being provided by the Government for this purpose.

For IDBI Bank, the merger will mean a stronger balance sheet, which is extremely essential in today's banking scenario," said an official.

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