BankAm to sell retail arm

"We would certainly hope that in selling our retail banking business in India the purchaser might offer employment opportunities to many of our current employees," she said. The restructuring of Indian operations comes as BankAm recently merged with Nationsbank in the US.

In New Delhi, Bank of America said that it is sellingoff its retail banking operations in India saying "size and scale of its operations here were not enough to make it a dominant player."

The decision forms part of a restructuring in the bank’s operations in Singapore, Taiwan and India, managing director and regional manager of Bankam, Arun Duggal said here. BankAm’s retail operations in India comprise car loans, loans against shares and deposits and constitute 20 per cent of its business here, Duggal said.

The corporate banking side comprising project finance, investment banking, cross-border deals among others and constitute 80 per cent of its business here would remain the bank’s area of focus, he said.

The bank’s 350 strong workforce in retail side will be given the option of either continuing under the new owners or taking the severance package, Duggal said. The proceeds from the sale would be ploughed back into the corporate banking services. "The money will stay in India," Duggal said.

The bank expected the deal to be over before the first half1999 adding the talks with prospective buyers have already started. He, however, declined to give names. "Its too premature to give any names," he said adding Bankam’s first priority would be to look after the interests of its employees and clients in the restructuring exercise.

On persistence queries regarding the reaction of the employees to the sale, officials claimed that after initial objections they had veered around to the view that it was a "win-win situation for them."

Sources say that BankAm is offering close to Rs one crore for a retail official with 10 years seniority. Staffers with around five years experience would stand to get at least Rs 20 lakh. This would cover all people designated assistant vice-presidents.

For those who have just a one year seniority, BankAm is planning to give a Rs nine lakh handshake. It has also reworked the repayment plans for other sundry loans taken by its retail employees. Notwithstanding the lucrative deals offered, many retail employees are still stunned bythe decision to close the retail operations.