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Despite resignations, uncertainties — Show goes on at IDBI Bank

Poornima Mohandas

MUMBAI, July 4

WORK is as usual at the corporate headquarters of IDBI Bank, Kamala City, Lower Parel in Mumbai despite the CEO having put in his papers.

Not only is the CEO, Mr Gunit Chadha, who is credited with having set the bank on the fast-track, leaving by August 21, the bank has also seen two functional heads of operations and HR put in their papers too.

Meanwhile, the Standing Committee of Parliament is chalking out a possible merger of the bank with its NPA- afflicted parent, IDBI.

The morale of the employees of the bank with a total strength of 1,400 and average age of 29 years, may have been down temporarily soon after the top-level resignations. "... We are too busy working to meet our quarterly targets. We can't put that on hold just because of these incidents, besides we had known six months ago that Gunit was leaving,'' said a mid-level officer of the bank.

"Having lived in uncertain times before, the present situation is nothing new for most of the mid-level employees. Everyday we see something in the newspapers about the merger proposal, it has become more of a joke for most of us,'' he added.

He is confident that there will be no mass exodus from the bank. Attrition rates at the bank are one of the lowest this quarter, said an official.

The more mature and experienced functional heads, pushing their forties have lines of worry forming across their forehead more than anybody else. "We might see our ability to act independently curtailed and fewer slots if we were to be merged with IDBI. Yes this is a sword hanging over our heads but I don't foresee anybody else leaving,'' said an official in the upper-deck of the bank.

The functional heads of the bank comprise the management committee, which overlook the day-to-day functioning of the bank.

The bank has been growing its retail book at the same pace it had in the last year and the corporate book has grown by an astounding Rs 300 crore in the March-June quarter this financial year.

The capital starved bank, with its capital adequacy hovering at the mandatory 9 per cent mark, has grown its corporate book in anticipation of the rights issue of Rs 154 crore that is expected to be raised in September. Most of the corporate loans given out this quarter have been deferred business opportunities from the fourth quarter of 2003 since the bank was overtly cautious towards the close of the financial year and the compilation of annual figures. The corporate book now stands at about Rs 4,000 crore.

The bank has, however, deferred some strategic business decisions on account of the lack of clarity on the merger issue. Although the in-house team is all ready to enter the small and medium enterprises business — an area many foreign and private banks are now eyeing — the venture has been put on hold.

However not all initiatives are being delayed. The bank has made an experimental foray into direct agri-lending through contract farming this quarter taking a cue from other private banks.

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