IDBI Panel To Chalk Out Transition Blueprint

Mumbai, July 30: | Updated: Jul 31 2003, 05:30am hrs
The Industrial Development Bank of India (IDBI) has formed a commercial banking implementation committee, headed by executive director R Jayaraman Iyer, to prepare a blueprint for conversion of the development financial institution (FI) into a wholesale corporate bank.

The FI has also initiated the process of offering a voluntary retirement scheme for those who are not interested in joining the post-conversion organisation as suggested by the parliamentary standing committee on finance, which looked into the Industrial Development Bank (Transfer of Undertaking and Repeal) Bill, 2002.

Earlier there was a committee called universal bank implementation committee. This was disbanded sometime back as the proposal for conversion of the FI was stuck with the parliamentary committee. As the standing committee has cleared the proposal with suggestions, it was revived on Monday, an IDBI official told FE.

The three members inducted into the committee afresh are chief general manager HSG Shetty and two general managers BK Batra and Ananthakrishnan. IDBI had prepared voluntary retirement service packages on three occasions in the past too, but they were not taken to the implementation stage.

However, this time the implementation of the scheme is mandatory as it is one of the suggestions of the parliamentary committee.

Earlier, the FIs management had proposed to make it mandatory that employees who are not interested in joining the converted organisation should leave it. The parliamentary committee made this suggestion based on the representations submitted by the IDBI Officers Union and Class III and IV workers unions during their meetings with the committee.

The standing committee has also recommended tax concession for the post-conversion bank for five years besides approving sops offered by the Centre to the FI on conversion, like moratorium on the FI adhering to the reserve requirement as applicable to banks cash reserve ratio and statutory liquidity ratio.

The IDBI conversion bill was tabled in the winter session of Parliament last year. On opposition to the bill from some members of Parliament, the Bill was referred to the standing committee.