Workers at ING Vysya Bank, which is being purchased by Kotak Mahindra Bank Ltd, have sought job and wage guarantees from the billionaire founder of the acquirer.
The All India ING Vysya Bank Employees Union will approach the Reserve Bank of India and the finance ministry to ensure jobs aren't cut, said K J Ramakrishna Reddy, head of the Bengaluru-based union, which represents 25 per cent of ING Vysya's employees. Billionaire Uday Kotak's bank on November 20 agreed to acquire ING Vysya for $2.4 billion and in a statement on Friday said it will welcome all employees from ING Vysya.
There is "no clarity regarding our employment and service conditions," Reddy, said in a phone interview on Thursday. The leaders of the union will meet on December 7 and 8 to decide on "further course of actions," he said.
The acquisition, which will help Kotak become the fourth- largest bank outside state control, may get bogged down by the unions, Morgan Stanley said in a note on November 20. About 35 per cent of ING Vysya's 10,591 employees are affiliated to one of the two unions, according to the report by the New York-based owner of the world's largest brokerage.
"It is urged that employees of ING Vysya Bank, at all levels, should have no concerns on their career and future as employees of both banks," Kotak Mahindra's spokesman Rohit Rao said in an e-mailed response. "The combined entity will generate ample career opportunities for staff as well as a wider array of products to serve their customers."
Kotak Mahindra rose 1.7 per cent to Rs 1,245 at 2:04 pm in Mumbai, while ING Vysya gained 0.8 per cent to Rs 863.70.
Salaries and employment of ING Vysya employees are governed by the so-called awards and bipartite settlements, unlike at Kotak Mahindra, the union said. Under the bipartite settlements, the unionised bank employees negotiate with the association of bank managements to decide on salary hikes.
Kotak, 55, founded the Kotak Mahindra Group in 1985 as a financial-services company. It received a banking licence in 2003, making it the first non-bank finance company in the nation to become a bank. ING Vysya was started about 80 years ago and has about two million customers.
ING Vysya is controlled by Amsterdam-based ING Groep NV. ING expects the transaction to result in a $188 million gain upon closing, based on Vysya's book value at the end of September, it said in November. ING will have a stake of about 7 per cent in the merged company, it said.
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