NEW DELHI: With the government clearing the merger plan of State Bank of India (SBI) and its five associate banks – State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala and State Bank of Hyderabad – India’s largest bank is gearing up to become even larger.
While SBI plans to complete the merger in the next financial year, it will need to address a handful of issues including convincing trade unions which are opposed to the merger.
“It will not help the employees or customers. The merged entity will be too unwieldy and prone to risk,” said Rajen Nagar, president All India Bank Employees Association.
He said now that the Cabinet has decided to go ahead with the merger, all related unions have come together and a new course to oppose it will be taken on February 28. Nine major bank employees union have formed a United Forum of Bank Unions, which also includes existing major unions such s All India Bank Employees Association and All India Bank Officers’ Association.
When contacted for response, a senior official in the Department of Finance Services in the finance ministry told Express, “It is not an issue to be discussed through the media. The government is open to hearing the unions’ concerns, which it will do in the greater interest of the employees of the banks.”
The merger was announced last May 2016 and the central board of the bank approved the proposal in August along with the share swap ratio. The Union Cabinet put its stamp of approval on February 15, 2017.
After the merger, the new entity will have 23,899 branches and an employee strength of 2,71,765. The merged entity will have an asset base of Rs 37 lakh crore with 22,500 branches, 58,000 ATMs and 50 crore customers. Currently SBI alone has close to 16,500 branches, including 191 foreign offices spread across 36 countries.
According to SBI chairman Arundhati Bhattacharya, the issues relating to the wages of the employees of the associate banks have been taken into account and employees’ wages would be protected as assured by the finance ministry.
Analysts representing the firms that are likely to advise SBI in the merger told Express, on condition of anonymity, that the preliminary examination of the balance sheets of the banks indicates good synergies in terms of treasury, offices, auditors and information technology infrastructure.