Kotak Mahindra Bank is committed to providing the ING Vysya's employees 'job security, wages, pension including DA-linked adjustments, PF, gratuity'
Mumbai:Kotak Mahindra Bank Ltd, which is acquiring ING Vysya Bank Ltd in an all-stock deal valuing it at $2.5 billion, is committed to providing the latter’s employees “job security, wages, pension including dearness allowance-linked adjustments, provident fund, gratuity," ING Vysya Bank said in a statement to the BSE on Tuesday.
ING Vysya was providing a clarification sought by the stock exchange after media reports said some employees of the lender are opposed to the merger with Kotak Mahindra due to concerns over wages and job security.
The clarification came just ahead of the extraordinary general meeting (EGM) slated on Wednesday of both banks to approve the merger announced in November.
“We would like to start with a good faith constructive approach that secures all employees and creates growth for all stakeholders including employees after the RBI (Reserve Bank of India) order," ING Vysya said citing a Kotak spokesperson.
About 35% of ING Vysya’s 10,591 employees are unionized and are opposing the merger, fearing job losses and wage cuts, a report by Bloomberg said last week.
These employees have called a strike to oppose the merger on Wednesday.
In its notice to BSE, ING Vysya produced a letter from Dipak Gupta, joint managing director, Kotak Mahindra Bank, to ING Vysya chef executive officer (CEO) designate Uday Sareen dated 19 December 2014.
“Employees/officers of ING Vysya bank will be provided such terms and conditions as to remuneration, emoluments and perquisites that are no less favourable than what they were entitled to before the proposed merger and with continuity of service," Gupta said in his letter.
“Existing retiral benefits availed by the employees in relation to provident fund, pension, gratuity and superannuation will be transferred to Kotak Mahindra Bank on completion of the proposed merger and will continue," Gupta added.
Kotak Mahindra Bank shares lost 1.04% to close at ₹ 1,251.70 per share on Tuesday on the BSE, while shares of ING Vysya Bank Ltd lost 1.33% to close at ₹ 860.05 per share. The benchmark index, Sensex lost 3.07% to close at 26987.46 points.