IDBI Bank, IDBI merger may take off

‘‘We have set up the bank, seen it grow and prosper. It’s a big brand now, and carries the IDBI name. If we sold it, the buyer wouldn’t be able to use the IDBI brand anyway. So quite clearly, the buyer wouldn’t pay for the IDBI brand,’’ he said.

Besides, with 99 branches, IDBI Bank can provide the perfect fit to IDBI’s own gameplan. IDBI itself plans to start off banking operations with its own 100 branches. ‘‘Adding IDBI Bank’s network, we will then have 199 or 200 branches and can hit the ground running’’, Damodaran said in an exclusive interview.

The IDBI chairman said while continuity would be through the development finance activity, the change would be brought about by the way in which the new entity operates and also by the addition of new, retail banking, activities.

He said while the board had taken approval to complete the conversion into a bank latest by October 1, 2004 (the reason being it would be after the first half of the current fiscal), Damodaran said internally all efforts were being made to complete the process by July 1 itself. ‘‘October 1 is just an outer limit we have taken,’’ he explained.

On the anvil are other important moves. The IDBI board has already given clearance to a plan involving the merger of IDBI Home Finance, its 100 per cent housing finance arm, with itself, since that would allow the newly converted bank to get into housing finance on its own balance sheet.

However, IDBI Capital Market Services, the primary dealer arm, will continue as a subsidiary. Its former managing director, G.V. Nageswara Rao, now heads IDBI Bank as its managing director.

In its bid to become more efficient, IDBI has already streamlined decision-making, Damodaran said.

‘‘Some committees have been integrated, and they meet frequently. Committees have also been empowered. There has also been substantial de-layering. Earlier several people used to be involved in every case. Now, it’s three people or less per case,’’ he explained.