The Hindu Business Line : SBI consolidation

The financial scenario in the country is eagerly waiting for the consolidation of the State Banks of the country. Economic experts and financial consultants even from abroad have remarked that it is embarrassing and ridiculous to see eight units under one chairman and one central office competing with each other in the market.

As originally envisaged, when the Subsidiary Banks Act came into being in 1959, the merger should have taken place by 1969, that is, within ten years.

The main factor preventing this has been the objections from trade union circles, despite the fact that the majority of staff members of the banks welcome the merger. This fact is clear from a recent press report that a prominent trade union leader has asked ‘workmen directors’ to ‘walk out’ of the board meeting to be held to discuss the merger.

As a result, the unions may lose few bank directors and certain privileges. Apart from this, it will not affect either the staff members or social banking in the country. In Kerala, there have been four bank mergers in the last two decades — the Bank of Cochin, Parur Central Bank and Nedungadi Bank (the oldest bank) were all merged with PSBs and, recently, Lord Krishna Bank with a private bank. In all these cases, there were none of the kind of objections now raised.

The Government should, therefore, take necessary measures to ensure that the progressive step taken by the State Bank of India is not sabotaged by vested interests.

George Joseph Kochi

More Stories on : Letters | Public Sector Banks | State Bank of India

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