Uco chairman and managing director Sharda Singh said the six unions were signatories to a May 1997 memorandum of understanding with the management.

Singh said the bank's board gave its seal of approval in April this year, following which the All-India Uco Bank Officers Federation had voiced its protest.

Singh said the 1997 MoU had stated clearly that the restructuring process would start with the merger of divisional and zonal officers wherever they co-existed. Based on the reports of several agencies which recommended a three-tier set-up by abolishing the zonal office, the board finally gave its clearance for setting up five operating head offices under the overall control of general managers.

Just before Singh's press conference on Tuesday, the federationreleased a note protesting the "bank's deliberate attempt to make the officer director a party to the ill-conceived restructuring of bank's administrative set-up".

Reacting to this, Singh said the union's argument did not hold as it was aware of the restructuring move when it signed the MoU in 1997.

He allayed fears expressed by some employees that the restructuring would lead to disintegration of the bank and hasten the process of merger. He added that even the MS Verma panel on revival of weak banks had gone on record that it is against mergers and did not regard it as a solution.

He also clarified that there was no question of shifting the bank's head office now. "We have only decided to shift control functions to the field level. As a result, 90-95 per cent of operational decisions will be taken there. There will only be minor realignment of duties in order to make sure that policy decisions are taken in the correct way," he added.

Uco today launched a 'Special Settlement Scheme' (mandated by theReserve Bank of India) for settlement of "chronic" loan overdues of borrowers in the priority sector.

Explaining the scheme, Singh said it applies to the priority sector loans which had become non-performing assets prior to March 31, 1996.