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Santanu Sanyal

Oriental Bank of Commerce has filed FIRs with the CBI against 29 cases involving 50 borrowal accounts, totalling NPAs worth more than Rs 1,300 crore.

Kolkata , Nov. 16

THE Chairman and Managing Director of Oriental Bank of Commerce, Mr K.N. Prithviraj, said many of the accounts, belonging to the erstwhile Global Trust Bank (GTB), against whom the Central Bureau of Investigation (CBI) had registered cases, had started negotiating for settlement.

Oriental Bank of Commerce (OBC) filed FIRs with the CBI against 29 cases involving 50 borrowal accounts, totalling NPAs worth more than Rs 1,300 crore. CBI has registered cases against 11 of them.

Mr Prithviraj told Business Line, "the merger of GTB put considerable strain on OBC. Fortunately, we have succeeded in handling it ably and the merger is through without any hitch," he said.

"We've set a recovery target of Rs 500 crore for the 2005-06, and till September 30, we achieved nearly Rs 200 crore, and we hope to cross the target during the second half," Mr Prithviraj said.

In 2003-04, OBC's NPA level was zero. However, the gross NPA to gross advance ratio jumped to 9.1 per cent in 2004-05 following the merger of GTB. The target for the current year has been set at 7 per cent. The net NPAs to net advances ratio is targeted at 0.5 per cent for the current year. Till September 30, it was 0.8 per cent.

Ever since Mr Prithviraj joined OBC in May , his biggest challenge had been to achieve a smooth merger of GTB and the settlement of the HR issue which proved to be the most critical.

"There was no proper pay-structure in GTB, nor any comprehensive HR policy and, despite fancy salaries being given to a select group of officials, there was no corporate governance in that bank," he said, adding, "We engaged the National Institute of Bank Management to suggest how we should go about it and accepted the recommendations, by and large."

The merger date was August 14, 2004 and since then there has not been single case of retrenchment. "Not a single depositor has lost his money," Mr Prithviraj said.

Out of an estimated 1,200 officers of GTB, more than 500 have already left. There are still 650 of them, mostly frontline and middle-level officers.

"They are good people and we've absorbed them," he said. The jobs of class III and IV categories were outsourced in erstwhile GTB. These categories of employees were poorly paid and there was virtually no service rules for them. The unions demanded their absorption as regular employees.

The government left the matter to the board of the bank. "We've decided to absorb about 400 employees into our bank and they are now all in the OBC family," Mr Prithviraj said, complimenting the union, affiliated to the AIBEA, for extending full cooperation in the matter.

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