Uncertainty about the merger of Industrial Development Bank of India with IDBI Bank is taking its toll on the latter. Three senior level executives from the bank have put in their papers.

Anil Kumar, head of cash management service operations; Ravi Nair, head of Internet banking and Aditi Pundale, head of call centre, have put in their papers. Head of product and sales, Anil K Sachidanand, recently joined HDFC Bank.

Kumar is joining ICICI OneSource, while Pundale is joining Prudential UK's outsourcing subsidiary's Indian arm, which has been set up in Mumbai, Powai. Nair is moving to the Middle East. Bank officials were not available for comment.

Recently the bank's human resources head, Ulhas Deshpande and head of operations and retail assets Kumar Subramanian had resigned. They are in the process of starting a business process outsourcing firm. IDBI Bank's managing director and chief executive, Gunit Chadha, tenure is coming to an end on August 21. He is joining Deutsche Bank as its country head.

However no decision has been taken on the position of the MD by IDBI. The institution is waiting for the IDBI repeal bill, which is likely to be cleared by Parliament soon before taking any decision on who would head the bank. Senior officials of the bank are also waiting for the final outcome of the bill to take a final decision.

In the event of an insider being picked for the post of MD in IDBI Bank, the choice will boil down to two candidates between country head, retail banking, Ajay Bhimbett and country head, corporate banking, Sushil Kak.

Meanwhile, PTI reports from New Delhi that IDBI hopes to increase its profits after it is converted into a bank and meet the Reserve Bank of India's prudential norms after five years, its chairman P P Vora said. "We have always been in profits. We hope, IDBI will post huge profit after the conversion," he said.

While expressing optimism about its universal banking plans set to be rolled out after Parliament clears the IDBI Repeal Bill. IDBI's proposed 'business model', drawn up last year, envisages that if the DFI is converted into a bank in this fiscal, then it would post a net profit of Rs 493 crore (Rs 4.93 billion) in 2003-04, with total income projected at Rs 6,427 crore (Rs 64.27 billion) and expenses at Rs 5,003 crore (Rs 50.03 billion).

The profits will go up to Rs 583 crore (Rs 5.83 billion) in 2004-05, and further to Rs 607 crore (Rs 6.07 billion) in 2005-06, Rs 653 crore (Rs 6.53 billion) in 2006-07 and Rs 671 crore (Rs 6.71 billion) in 2007-08.

The profit projection is based on the reduction in cost of borrowing after the conversion of the DFI into a bank.

"After conversion into a bank, we will raise funds through all kinds of deposits - current, savings and term deposits," Vora said.

It is estimated that IDBI would be able to raise about Rs 5,000 crore (Rs 50 billion) per annum by way of savings, current and fixed deposits. Another Rs 4,500 crore (Rs 45 billion) would come from bonds.

After providing for cash reserve ratio and debt servicing requirements, IDBI is slated to advance Rs 5,000 crore (Rs 50 billion) in the first year of its banking operations.

Last month, the standing committee on finance had approved IDBI's conversion but asked the government to retain 51 per cent, provide tax benefits and come up with a voluntary retirement scheme plan.

Tax sops were recommended as the house panel was doubtful over IDBI meeting the RBI's prudential norms in the sixth year of banking operations.

But IDBI's business model estimates that the 5-year moratorium would enable IDBI to strengthen its financial position so as to abide by RBI rules from the sixth year.

"We have been meeting the statutory requirements throughout. We will meet them after the fifth year as well," Vora said.

The government is now in urgency to pass the bill to repeal IDBI Act of 1964.

Accordingly, necessary changes have been made in the Industrial Development Bank (transfer of undertaking and repeal) Bill of 2002 and cabinet approval has been taken.