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July 16, 2001
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Money > Business Headlines > Report July 16, 2001 |
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Employees body against using IDBI to bail out UTIBS Economy Bureau The IDBI Officer's Association is against any move by the government to use the financial institution to bail out other FIs including the Unit Trust of India and the IFCI Ltd. "The government should not ask IDBI to bail out others," M Ghosh, the president of the All India IDBI Officers' Association, said. He said that even on an earlier occasion the government had used IDBI to bailout UTI, which has not paid off well. The association has maintained that the proposed merger with IFCI will affect IDBI adversely. While IDBI enjoys a AAA rating, IFCI is rated four notches below at A+, and IDBI's rating will be affected once the merger takes place and thereby weaken IDBI's position compared to its competitors. IDBI, which is already grappling with growing NPA levels, will be hit further because of the merger, the association said. Similar problems will also be faced in meeting the prudential norms and the merger will not provide synergies in operation. Echoing his association's view, Ghosh said instead the government should reposition IDBI as the apex institution and stop meddling in the day-to-day work of the FI. Ghosh also called for the appointment of a new full-time chairman at the earliest so that the decision making process can be strengthened. IDBI has been without a full-time chairman since G P Gupta retired in January this year. Since then, S K Chakrabarti has been the officiating chairman. Chakrabarti received a three- month extension, which is also slated to be over at the end of this month. "IDBI has failed to meet the challenges of the nineties as effectively as its competitors mainly because of rigid inflexible attitudes and outdated delivery systems, as well as its inability to attract and retain the right talent with it on account of the extremely poor remuneration level which is out of sync with the environment," the association has said. Ghosh said that a large part of the talent pool trained by IDBI goes to other organisations as the pay scales in the FI are below the levels prevailing in the industry. Powered by YOU MAY ALSO WANT TO READ:
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