IDBI staff upset over public sector tag

The recent categorisation of IDBI as an 'other public sector bank' has created discontent among the staff of its commercial banking arm as the move is likely to affect the remuneration package of the new recruits.

"Considering its shareholding pattern, IDBI Ltd may be considered a government-owned bank. In view of the assurance given in Parliament on December 8, 2004, by the finance minister...that the government's holding in IDBI Ltd would always be above 51 per cent, the financial institution is categorised under a new sub-group called other public sector bank," an RBI notification, dated April 15, said. The memo is also available on the IDBI website too.

Even existing employees of its commercial banking strategic business unit (CBSBU) ) - erstwhile IDBI Bank - are not sure whether their pay scales will be protected fully once the integration process is complete.

The modification in the development banking entity's character necessitates that new recruitment should be undertaken as per pay scales of a public sector bank (PSB).

However, this contradicts the original scheme of amalgamation of IDBI Bank with IDBI Ltd, said a source.

According to the original scheme of amalgamation, the pay structure of CBSBU would be benchmarked to market-related compensation structure. In other words, the pay scales will be similar to its rival private and foreign banking entities operating in India.

Officials of the bank fear that such ambiguities, besides affecting the recruitment procedure, may prompt the employees of this unit to look for greener pastures.

A few IDBI Bank employees, particularly in the treasury division, have already left the organisation. They have joined foreign banks and other private banks.

When contacted, IDBI chairman V P Shetty said: "There are several clauses in the amalgamation scheme and there will be no violation (of norms) even if we recruit new employees at PSU pay scales."

However, officials of the erstwhile IDBI do not seem to be convinced.

"We agreed upon the merger of the two entities only because our identity and autonomy will be maintained through the concept of two different SBUs. But in practice, there have been many changes to the original scheme of amalgamation, which will have adverse effects on the bank's functioning," one official said.

At present, pay scales of the staff of the development banking strategic business unit (DBSBU) of IDBI are linked to that of the RBI, which is higher than that of PSBs.

On the other hand, the CBSBU employees' salaries are similar to their private and foreign counterparts.