Scam arbitration award may hit Grindlays-Stanchart merger
Mumbai: In a move that may put a spoke in the Stanchart-Grindlays merger, the Reserve Bank of India has demanded comfort letter from Standard Chartered Bank on honouring the ANZ Grindlay’s undertaking given to court on the Rs 907-crore arbitration award against National Housing Bank. This letter is being sought as a precondition to clearing the StanChart’s acquisition of Gindlays operations in India.

Although Stanchart has assured RBI that post acquisition, the two entities will continue to function for at least a year and no decision will be taken in regard to the staff without the central bank’s nod, the RBI has asked for the blueprint for the staff redeployment policy post acquisition.

Stanchart, which needs the clearance of close to a dozen central banks on its $1.3 billion acquisition of Grindlays business in West Asia and South Asia, may find the central banks of Bangladesh, Sri Lanka and Nepal unwilling to give the green signal till the Indian central bank clears the deal.

According to sources, RBI is acting cautious on the HRD front and it does not want to be dragged into any litigation. Stanchart trade unions in Madras have made the RBI a party to a case challenging the voluntary retirement scheme introduced by the bank a year ago.
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