The Hindu Business Line : IFCI staff prefer IDBI to PNB

FOR some it may appear to be fight for a hopeless cause, but IFCI employees are making a last-ditch effort to halt the institution's proposed merger with Punjab National Bank (PNB).

Pressure is being mounted on the Government by the Officers' and Employees' Association of IFCI to halt the merger of the development financial institution with PNB and instead look at a merger with IDBI.

A delegation of the Coordination Committee of IFCI Officers' and Employees' Association has recently met top officials of the Ministry of Finance to press for their demand for merger with IDBI. The meeting was held subsequent to the merger proposal being cleared by the Board of Directors of PNB and IFCI on January 30.

"We are not in favour of a merger with PNB as it would lead to serious complications. Moreover, there are several advantages of merging similar institutions that had been functioning as designated financial institutions (DFI) such as IDBI and IFCI had been over the years," said Mr Ram Khobragade, Convener of the Coordination Committee of IFCI Officers' and Employees' Associations.

A merger of IFCI with IDBI would have been a smooth affair since the latter already holds a stake of 31.71 per cent in the former. Moreover, the adjustment of staff in the merged entity would have been easier as both the institutions had similar pay-scales, perquisites and other service conditions, besides their personnel having similar nomenclature of designations.

Mr Khobragade said that the demand of the co-ordination committee has been strengthened by the announcement by the Finance Minister, Mr Jaswant Singh, in the interim Budget that IDBI would retain its DFI status even after its conversion into a commercial bank. Mr Singh, in fact, had said that IDBI would act as a lead institution for infrastructure financing in its new form.

"Both IDBI and IFCI were established with the only objective of balanced industrial development of the country. Both, incidentally, are in the restructuring mode. If merged together, the objective of overall industrial development of the country could be better achieved as our functioning is similar," Mr Khobragade said.

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IFCI staff prefer IDBI to PNB