Employee unions of ING Vysya Bank today demanded safeguarding of their interests post merger with Kotak 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', SA 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 KMB 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.
ING Vysya Bank stock price
On December 26, 2014, ING Vysya Bank closed at Rs 856.10, up Rs 0.00, or 0.00 percent. The 52-week high of the share was Rs 886.85 and the 52-week low was Rs 493.00.
The company's trailing 12-month (TTM) EPS was at Rs 33.03 per share as per the quarter ended September 2014. The stock's price-to-earnings (P/E) ratio was 25.92. The latest book value of the company is Rs 370.85 per share. At current value, the price-to-book value of the company is 2.31.
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