Employee unions of ING Vysya Bank today demanded safeguarding of their interests post-merger with Uday Kotak-led Kotak Mahindra Bank and threatened to go on strike on January 7 — the day on which the Bengaluru-headquartered lender will seek shareholders’ nod to approve the Rs 15,000-crore merger deal.
To ensure that interests of all the stakeholders are ‘protected’, S A Sridhar from the ING Vysya Bank officers’ association said a “tri-partite agreement” between Kotak Mahindra Bank (KMB), ING Vysya Bank, and employees and officers, be signed which will lay out all points in detail.
The All India ING Vysya Bank Employees Union and All India ING Vysya Bank Officiers Association, which together represent 35 per cent of the Bangalore-headquartered lender’s over 10,000 employees as members, however, said they are not opposing the merger but want their interests to be protected.
“We have an apprehension as the new management at Kotak Mahindra Bank does not have an Union and believes in outsourcing its work. What will be the fate of our employees after the merger?” Ramkrishna Reddy, general secretary of the employees union told reporters here.
He added that recently KMB wrote to all the ING Vysya Bank employees to allay the concerns but ‘bypassed’ the unions.
Reddy emphasised that the Uday Kotak-led bank should go through the union if it is “sincere” about its efforts.
ING Vysya Bank spokesperson could not be immediately reached for comment. However, a representative for ING Vysya Bank referred to legal opinion of advisors to the deal, which said such a tripartite agreement is “infructuous”.
There is no precedent of such an agreement in previous bank mergers, the legal opinion said, alleging that such a demand “seems to be red herring i.e. something that misleads or distracts from relevant issues”.
ING employees and officers want internal MoUs to continue post-merger, and also stressed that perks and benefits decided by industry body IBA be continued, Sridhar said.
Kotak Mahindra Bank spokesperson Rohit Rao said: “The merger process entails as per the Banking Regulation Act, approval of the shareholders and thereafter approval from the RBI in addition to CCI’s approval.
“All protection related to employees have already been captured in the scheme of amalgamation which upon approval by RBI, Kotak Mahindra Bank shall fully standby and are obligated to comply with including sections relation to employees job security, wages, pension, gratuity etc.”
As is evident we would like to start with good faith constructive approach that secures all employees and creates growth for all stakeholders including employees after the RBI order, Rao added.
In a letter, KMB’s Joint Managing Director Dipak Gupta has written to ING Vysya Bank’s Chief Executive designate Uday Sareen saying that KMB will be honouring all IBA settlements and bi-partite agreements.
In one of the biggest deals of 2014, KMB had announced an all-stock deal to acquire ING Vysya Bank late last month. According to KMB, complementarity is at centre of the deal as this will give it the necessary branch network in the south.
In a note earlier this month, foreign brokerage Morgan Stanley had said the unions may have apprehensions regarding the merger and had spelt it as a key issue to watch out for.
Meanwhile, the ING Vysya Bank unions also made allegations against the senior management about money laundering and granting housing loans with high leverage.
They claimed that one of the bank employees has written to RBI Governor Raghuram Rajan pointing to the mis-governance at the bank. However, the “whistle-blower” employee who wrote to RBI is being harassed by the bank in different ways and false police cases have been filed against him, Reddy alleged.
The unions, however, declined to share the whistle-blower’s communication saying they will come out with it at the right time.
The ING Vysya Bank representative said the lender was penalised along with 21 others for money laundering and suggested that it is unfair to single it out.