The Hindu Business Line : Board meeting put off; SBI group consolidation likely to be delayed

New Delhi, Jan 22 Consolidation of associate banks’ of State Bank of India (SBI) with their parent bank is likely to get delayed for some time if the latest turn of events is any indication.

The crucial board meeting of the six associate banks of SBI slated for January 24 to consider an in-principle nod for merger with their parent bank has been put off.

Banking industry sources also said that State Bank of Saurashtra (SBS), which was looking to merge with SBI, has now modified its earlier approved board resolution to enable SBI to acquire it rather than go in for a merger transaction.

An acquisition transaction is unlikely to face legal hurdles as the SBI Act does have specific provision to allow for acquisition of banks. With the consolidation of SBS not taking shape at the desired pace, the SBI management, it is learnt, has now kept in abeyance its earlier instruction to associate banks to treat all their transactions in relation to SBS as part of SBI transactions from January 27.

Meanwhile, the associate banks’ union leaders are understood to have conveyed to the SBI management at their meeting in Mumbai on Tuesday that the entire issue of unions’ opposition to merger should be discussed at the level of government and the United Forum of Bank Unions.

The SBI management’s move to postpone the board meeting of associate banks notwithstanding, the bank employees and officers are to strike work on January 25.

“There appears to be no meeting point on the demands or the merger issue. I think the meeting with Chief Labour Commissioner and IBA on January 23 is unlikely to yield results as there is no indication from both the sides that they want to resolve the matter. We will go ahead with the strike as planned”, Mr C.H. Venkatachalam, Convenor of UFBU told Business Line.