To a query related to the morale of the employees, M K Jain, the outgoing MD and CEO of Indian Bank said in an analyst call, "My personal view is that the morale of the people and motivation neither can be created overnight nor can be defused overnight... This is part of life, and everybody is aware that the CEO -- and everybody else -- has to leave the bank someday. I dont feel there will be any issue."
Commenting on the government's decision, an employee said that the incoming MD and CEO may only have 18 months tenure, since the appointment is for the remaining period of his current tenure or until further orders, while the incumbent MD and CEO has been appointed for a period of five years starting November 2015.
"He (Jain) could have been allowed to continue, and instead of transfering him, the government could have posted an executive director on elevation in IDBI Bank or allowed Kharat to continue till the end of his tenure. I dont think any purpose will be achieved by this kind of swapping of MD and CEO from one bank to another," said one employee on condition of anonymity.
A few employees believed that the move displays step-motherly treatment towards south-based banks. A change in the top management of Indian Bank, which is currently faring quite well, could slow down its momentum, they observed. However, they also said the move did not in any way reflect the efficiency of the new MD and CEO. They were mainly upset that the growth of a south-based bank was being compromised In order to bail out a bank from the north.
However, other employees said that the credit for the bank's performance, particularly its turnaround, does not go to the top executive alone, but is shared by all the people -- from those at the top to those at the lowest level, since it is a team effort.
If the government was keen on turning IDBI Bank around, it should taken action against its top 25 defaulters, instead of changing the top executive. Even if a new MD and CEO joins, the increasing NPA levels would continue to be a challenge for IDBI Bank.
For Kharat, the new job may not have much stress or strain compared to his earlier stint, since Indian Bank is sound in terms of its financial performance in comparison with IDBI Bank, which has been suffering with huge non-performing assets (NPAs).
"If the momentum of Indian Bank is allowed to continue, with a little more effort, certainly Indian Bank will flourish," added an employee.
Considering that these are public sector banks, the government has the right to decide on their operations and the latest move is also justifiable, said another employee.