IDBI to run UWB network as strategic business units

The merger of United Western Bank (UWB) with the Industrial Bank of India (IDBI) will become effective from October 3. This also marks lifting of moratorium on troubled private sector bank. Its branches will start working as a branches of IDBI from same date.

IDBI will operate UWB network as a strategic business unit (SBU). "It will be business as usual at UWB branches".

The mode of working at UWB branches will be same as they followed before the bank was placed under moratorium (September 2, 2006), IDBI chairman V P Shetty said.

"We see strength in UWBs branches including those in rural and sugar belt in Maharashtra". The bank (UWB) is known for its quality customer service. Its employees are important to us with crucial role in business growth and maintaining customer service standards, he said.

"Though a voluntary retirement scheme will be operational for one month as per the provisions legal provisions, IDBI will like to see that UWB employees remain with us", Shetty said.

UWB's headcount is 3,000 with clerical staff of around 1,000. The average age of employees is 46-47 years and thus IDBI will have to grapple with challenging of skill sets and knowledge and attitude change.

The Centre sanctioned the scheme for the amalgamation of UWB with IDBI on September 30. Reserve Bank of India had placed UWB under moratorium on September 2, 2006 citing falling financial health. The prescribed date for amalgamation is October 3, 2006.

IDBI will make an upfront payment of Rs 28 per share for fully-paid shares of UWB whose names appear on registers on prescribed date (October 3, 2006).

The Bombay High Court has said that it can only look into the decision making process used by the Reserve Bank of India (RBI) to place the United Western Bank under moratorium from September 2.

The court made it clear that it will not sit in judgement over the decision of the RBI, a regulatory body which has expertise in the financial sector.