Indian Overseas Bank mulls closure of regional offices
Chennai, Jan 6: City-based Indian Overseas Bank (IOB) is planning to close five regional offices in the country as part of its cost cutting measures, said officials.
The move has drawn the ire of MDMK leader Vaiko.
Speaking on condition of anonymity, a senior IOB official said the management has decided to close down several regional offices as a measure to cut down the establishment costs.
“The move would basically reduce the rental and power cost outgo. Operationally, it would not impact the customers in a major way,” the official told.
In a statement issued here, Vaiko opposed IOB’s move to close down the regional offices in Tamil Nadu located in Tiruppur, Nagapattinam and Dindugul.
Vaiko said the Tiruppur region does a business of Rs.3,582.18 crore while Dindugul and Nagapattinam regions transact a business volume of Rs.2,172.23 crore and Rs.4,490.77 crore respectively.
The MDMK leader said there are regional offices of IOB like at Raipur (Rs.798.98 crore), Dehradun (Rs.1,947.41 crore), Nagpur (Rs.1,453.15 crore) that transact much lower business volume but are not in the closure list.
“The closure of Nagapattinam regional office might affect low cost government deposits to the bank. The bank is the lead bank for two districts there — Nagapattinam and Tiruvarur,” a bank official said.
According to the IOB officials, the employees of regional offices to be closed would be posted in other offices.
“The move will also not make the bank top light. The direct benefit will be in the savings in establishment costs,” he said.
He said the other regional offices that are likely in the hit list are at Tirupati, Kozhikode, Agra, Jalandhar and Rajkot.
According to the IOB official, rather than closing the regional offices, the bank management can look at closing the zonal offices as their role is not properly defined.
He said some branches may also be on the hit list.
According to a bank source, the Reserve Bank of India (RBI) has asked IOB to freeze new recruitments.
An official told IANS that the bank board had sanctioned recruitment of around 950 messengers to be posted in the branches.
However, nothing much has happened after that and it is an open secret that the duties of the messengers are being done by some persons hired at the branch level.
“The management will get a certificate from the branches that no unauthorised person has been hired. But a branch cannot function without a messenger,” he said.
In October 2015, the IOB informed the bourses that the RBI has initiated a prompt corrective action on the bank.
“The directions given by RBI are for improving the internal control of the Bank and for the purpose of consolidation of the activities of the Bank,” the IOB said in the regulatory filing.
IOB’s managing director and chief executive officer R. Koteeswaran was not available to comment on the matter when contacted by. (IANS)