Merger delays prompt IDBI Bank staff to jump ship

The cloud of uncertainty over the merger of Industrial Development Bank of India (IDBI) with IDBI Bank is taking a toll on the bank.

Two senior executives of the bank have resigned over the last one month, while over half-a-dozen middle-level employees are believed to have put in their papers. Most of them have joined leading foreign banks, a source said.

Two senior executives leaving the IDBI Bank fold are Shameek Bhargava, head, alternative channels and card products, and Shalaka Gadekar, head, human resource development (HRD). The HRD chief is joining Centurion Bank, said sources.

IDBI Bank managing director Nageshwar Rao did not deny the development, but said: "This is a regular phenomenon and there is nothing much to read into it."

Bank insiders said uncertainty over the merger is affecting the morale of the staff. Last year, too, IDBI Bank witnessed a spate of resignations by senior executives.

IDBI, which holds around a 57 per cent stake in the bank, has kept the merger options with the bank open. IDBI is being converted into a bank with a special focus on project financing.

IDBI Bank has posted good results in the fiscal year ended 2003-04. The bank has registered a 86.3 per cent growth in its net profit to Rs 132.45 crore from Rs 71.10 crore. The bank declared a dividend of 12.50 per cent for the year ended March 31, 2004.

Net non-performing assets of the bank fell to 0.2 per cent against 0.9 per cent in the corresponding period last fiscal. The capital adequacy ratio of the bank is at 10.4 per cent compared with 9.6 per cent in the preceding year.

The bank is also on a branch expansion mode as it has received licences to open 28 new branches across the country.