The Hindu Business Line : Unions oppose State Bank of Saurashtra merger with SBI

The merger would only lead to a monolithic bank that would slowly shed its social responsibility. Only big corporates will benefit and not the common man.

K.R. Srivats

New Delhi, Sept. 8 The consolidation process initiated by State Bank of India (SBI) with its associate banks may hit a roadblock, with more than 35,000 employees of the associate banks deciding to observe a day-long strike on September 27 in protest against the proposed merger of State Bank of Saurashtra (SBS) with SBI.

These employees are part of the State Sector Bank Employees Association, which is affiliated to All India Bank Employees Association (AIBEA).

The strike call is the first reaction from the unions after the boards of both SBI and SBS gave in-principle nod for the merger deal on August 26. SBS is the smallest among the seven associate banks of SBI in terms of networth.

‘Not a good fit’

“We are opposed to consolidation of SBI with associate banks. This would only lead to a monolithic bank that would slowly shed its social responsibility. Only big corporates will benefit and not the common man. It would lead to branch as well as employee rationalisation. Even culturally, it would not be a good fit,” Mr C.H. Venkatachalam, General Secretary of AIBEA, told Business Line.

Besides employees of the six associate banks — State Bank of Patiala, State Bank of Indore, State Bank of Travancore, State Bank of Bikaner and Jaipur, State Bank of Hyderabad and State Bank of Mysore, the officers of State Bank of Indore would also take part in the strike.

Nation-wide strike

Mr Venkatachalam also said that a nation-wide strike involving employees of all banks was being planned. Although both the bank boards have given in-principle nod for the merger deal, SBI will have to get approval from both the Government, the majority owner of the bank holding 59.73 per cent stake, and the Reserve Bank of India. SBI’s controlling interests in the associate banks range from 75 per cent to 100 per cent.

SBS reported a net profit of Rs 87.4 crore in 2006-07, which represents a 45.4 per cent increase from Rs 60.1 crore recorded in the previous year. The bank has paid-up equity capital of Rs 314 crore.

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Unions oppose State Bank of Saurashtra merger with SBI