Federal Bank employees protest against takeover by ICICI Bank

James Paul
21 September 2004

Kochi: Employees of the Kerala-based Federal Bank, have protested against the possible take over by the ICICI bank. The employees have decided to mobilise support from shareholders and the public to prevent the takeover.

"Bank mergers hitherto occurred due to some exigency, but in our case there is no need at all as we are on a very strong wicket", said V K Prasad, deputy general secretary of the Federal Bank Officers Association.

ICICI Bank is currently the single largest shareholder with 20.44 per cent stake in Federal Bank, which has nearly 6,000 employees. With the Federal Bank''s annual general meeting scheduled for September 27, ICICI Bank is reportedly proposing to increase its strength in the bank''s board.

Currently, ICICI has two nominees on the bank''s eight-member board. With two of the present directors set to retire, ICICI bank proposes to get two more of its nominees elected at the annual general meeting, informed sources said. The two retiring members are M Joseph and M S Parthasarathy who are not ICICI nominees.

By virtue of ICICI Bank being the largest shareholder in Federal Bank, sources said, it can push through the election of its nominees.

Employees of Federal Bank feel the next possible steps before ICICI Bank would be to sell its stake in the Kerala-based bank, acquire it for a merger, or even keep it as a subsidiary.