KOCHI: Leading gold loan company Muthoot Finance Ltd said it has decided to close down a large number of its branches in Kerala after hundreds of its employees, a majority of them women, were prevented from entering the branches and more than 300 branches were forcibly shut by CITU-affliliated union activists on Monday.
The Kochi-headquartered NBFC has appointed chartered accountants PZ Chacko's & Co to find buyers for its gold loan portfolio of some of its branches in Kerala, in a clear indication to exit from these locations. “We’ve been retained by a leading NBFC having pan-India presence intending to sell out the gold-loan portfolio of some of their branches in Kerala which they’re contemplating to close down due to labour issues,” said a PZ Chacko's & Co advertisement.
CITU-affliated Non-Banking & Private Finance Employees Association has been creating trouble in Muthoot Finance’s branches in Kerala over the last couple of years, putting pressure on its employees to join the union. CITU also wants the association to be recognised by the management.
Here's a video where CITU argues with a woman staff, who clearly wants to work. She says she joined at Rs 3000 and now gets Rs 18,000. 'Not due to CITU,' she says. #MuthootFinance pic.twitter.com/0Z8sgSlEdX— Rajesh Abraham (@pendown) August 29, 2019
Muthoot Finance DGM (Communications) Babu John said most of its employees have no plans to join the association and CITU is trying to use “terror tactics” to prevent the employees from opening the branches. He said Muthoot Finance may be forced to permanently shut down 346 out of the 623 branches in the state.
Labour Minister to hold meeting on Wednesday
The Labour Minister T P Ramakrishnan has convened a meeting of Muthoot Finance management and the CITU on Wednesday to break the deadlock due to the trade union protests in the gold finance company’s branches in Kerala. CITU-backed Non-Banking & Private Finance Employees Association has been protesting outside Muthoot Finance’s branches in Kerala for the past several weeks, demanding wage hike and recognition of the union. Babu John, DGM Communication of Muthoot Finance said the company has not decided whether to attend the meeting as the company’s 2,800 employees are not members of the association.
“Why should we attend when none of my employees are even members of the association,” he asked. K N Gopinath, state secretary of CITU, however, alleged that Muthoot Finance management was, in fact, threatening to close down the branches so as to drive away workers from protesting. He also disputed the management’s version on employee count at the association saying only 1,123 Muthoot Finance employees were members of the Non-Banking & Private Finance Employees Association. The other demands of CITU include hike in increment for sub staff and hike in salary for those employees who have been working with the company for 20 years and above.
‘Gold loan biz slumps in Kerala due to protests’ Babu John said Muthoot Finance’s gold loan business in the state has declined to 4.57 per cent from 13.55 per cent due to the continuous disruption in the business by the trade union. On account of low business volumes in Kerala, the company’s average gold loan outstanding per branch in Kerala is around Rs 2.61 crore whereas in the branches outside Kerala, the average is around Rs 8.57 crore.
He said Muthoot Finance has submitted a memorandum signed by 2,400 out of its 2,800 employees to the Chief Minister urging his intervention to end the trade union protests. On the memorandum submitted to the Chief Minister, Gopinath alleged it contained the names of those who are retired and dead. He said Muthoot’s ‘sub staff ’ are being paid only Rs 10,000 per month despite the fact that they have been serving the company for over 20 years.
Total branches of Muthoot Fiance in Kerala: 623
Branches closed due to CITU stir: 358
Gold loan biz in Kerala down from 13.55% to 4.57%
Total employees in Kerala: 2,800 (70% women)