KOCHI: The proposed merger of State Bank of India’s Avoly branch with its Vazhakulam branch, which will be effective from Monday, has triggered a controversy with the local MLA, MP and its customers writing to the bank alleging that the merger was being proceeded without proper approvals and in violation of the Reserve Bank of India’s rules.
Avoly branch is the sole semi-urban bank in Avoly grama panchayat, and the RBI rules stipulate that any merger, closure and shifting of any rural banking outlet as well as a sole semi-urban banking outlet requires approval of the District Consultative Committee (DCC) /District Level Review Committee (DLRC) and Regional Office concerned of RBI.
“No banks have the right to merge sole semi-urban banks without the permission of DCC/DLRC,” said a petition submitted to Local District Manager (LDM) and the regional branch, adding that the entire panchayat will be denied banking facilities if the branches are merged, which is a “violation of RBI policy to ensure banking” to the public, mentioned the petition.
When contacted, C Satish, LDM of Union Bank, who is a member of DCC, said he was not aware if the DCC met to approve the merger. The petition said, “The move (merger) will adversely affect the people of Avoly panchayat. SBI’s is the only commercial bank in the entire panchayat. There are about 6,600 families here. Apart from this, there are innumerable industrial and business units in the panchayat.
Recently, the Indian Oil Corporation, Bharat Petroleum Chemical Ltd and Hindustan Petroleum have sanctioned three petrol pumps within a radius of two km from Avoly branch,” a petition to SBI’s regional manager said. Apart from many schools, there are two major institutions of higher learning viz., Vishwajyothi College of Engineering, Avoly, and Nirmala College.
The petition pointed out that the RBI rules clearly say that: “RRBs should also ensure that customers of the banking outlet, which is being merged/closed/shifted, are informed two months in advance so as to avoid inconvenience to them.” N Narayanan, chief manager of SBI, did not comment, saying he can’t provide any details.