Banks' tie-up on rocks as heads change

Strategic alliance between Oriental Bank of Commerce, Indian Bank, and Corporation Bank is not progressing as was envisaged, and change of guard at the top level is responsible for this, officials familiar with the development said.

Christened as OIC, the alliance that was launched in 2006 has made very little progress in the last one year and a half. The tie-up was touted as an alternative to mergers among Indian public sector banks.

The alliance had planned several new initiatives such as forging a joint venture for credit card business, jointly opening subsidiary abroad, among others. All these plans have taken a backseat now.

"All these banks are small ones, which are chairman driven and not system driven. Change in the top management of some of the partners has affected progress of the alliance," the official said. The idea of having a common OIC logo for the alliance has also been scrapped.

Both K C Chakrabarty and K N Prithviraj, the then chairman and managing directors of Indian Bank and Oriental Bank of Commerce respectively, are no longer with the bank. While Chakrabarty has taken charge of Punjab National Bank, Prithviraj has retired.

Alok Mishra joined as the new chairman and managing director of OBC from Canara Bank, where he was executive director while M S Sundara Rajan, who was executive director of Indian Bank, was promoted as chairman and managing director of the Chennai-based bank.

Only, B Sambamurthy, chairman and managing director of Mangalore-based Corporation Bank, is still continuing at his earlier post.

It is also learnt that Corporation Bank and Indian Bank that are still engaged in joint activities such as loan syndication, and are trying to convince the Delhi-based OBC's management to go ahead with the stated agenda.

The banks' top brass are expected to meet in the current quarter to decide the fate of the alliance, one way or the other.