Business Standard

Muthoot Finance may shut Kerala branches amid frequent union strikes


Muthoot Finance, the country's largest gold financing company in terms of loan portfolio, said on Thursday its staff is being threatened for life by workers of the Centre of Indian Trade Unions (CITU) which is an affiliate of the current ruling Communist Party of India-Marxist (CPI-M) in Kerala.
"The company has taken a decision that branches which are not being able to be opened because of the physical obstruction by CITU workers will be closed. All employees of the branch will be retrenched after meeting all statutory compliances required in this regard," it said in a statement.
In the past three years, a negligible number of employees have joined a trade union in Kerala under the outfit named Non-Banking and Private Finance Employees Association. Since this constituted only a small minority, said Muthoot Finance, this trade union is not required to be recognised as per present regulations in place.
"The outfit has declared an indefinite strike in branches in Kerala from August 20. Though a large majority of our employees are not part of this strike, they are unable to open branches because of the threats or forcible closure. The staff is being threatened for life if they open branches," the company said.
"These threats are made by CITU workers which is the affiliate of CPI-M, the current ruling party in Kerala. Some of the staff who dared to open the branches were threatened or physically assaulted leading to forcible closure of branches by CITU workers," said Muthoot Finance.
Out of 623 branches in Kerala, 265 were opened for transactions today of which 15 branches have been forcibly closed. Yesterday, 224 branches were opened for transactions of which 47 were forcibly closed. Muthoot Finance's business in Kerala is only 4.57 per cent, that is Rs 1,600 crore of its total gold loan portfolio of Rs 35,000 crore.
"In spite of the low business volume, the company has shown keenness to continue its business in Kerala as it is our home state. But if the threatening and forceful closure of our branches by the CITU workers is continued and branch remain closed due to no fault of ours, we will have no other option but to close down those branches which remain closed due to this forceful closure and retrench the employees of those branches," it said.
"The proposed actions will not have any material impact on the company's financials as a business in Kerala is not material to our overall business," it added.

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First Published: Aug 29 2019 | 5:35 PM IST

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