Money & Banking

Mega Bank mergers: FinMin moves to ensure smooth HR transition

KR Srivats New Delhi | Updated on October 08, 2019

The Ministry of Finance.   -  The Hindu

Asks banks to set up joint committee of EDs to sort out HR-related issues

The mega bank merger plan to consolidate as many as 10 public sector banks into four large entities may not face post merger Human Resources (HR)-related problems if the Finance Ministry has its way.

To smoothen the integration and address HR-related matters flagged by employees as well as their associations/unions, the Finance Ministry has directed the concerned banks to constitute a joint committee of Executive Directors in charge of HR to look into the issues concerned. The joint committee has to be constituted with the approval of the respective boards, said the Department of Financial Services in the Finance Ministry.

The committee has been tasked to submit appropriate recommendations to the top management and/or the bank’s board or relevant committee of the board, official sources said.

Recently, Finance Secretary Rajiv Kumar had indicated that the Finance Ministry was positive about the formation of a committee comprising all concerned to look into the issues raised by employee unions. Following this, four bank officers’ associations had deferred their strike call for September 25-27.

It may be recalled that Finance Minister Nirmala Sitharaman had, in August-end, announced the mega bank merger plan as part of overall efforts to have financially-stronger public sector banks that could support a $5-trillion economy by 2023. From a level of 27 PSBs in 2017, the number of such banks after the latest consolidation drive is proposed to be brought down to 12.

Amalgamations have not been new – Vijaya Bank and Dena Bank merged with Bank of Baroda and State Bank of India took into its fold its subsidiary banks. However, the HR situation at the ground level has not been very smooth.

Indifferent treatment

Even six months after the amalgamation came into force in April 1, there are integration issues at the officers’ level in the case of erstwhile Vijaya Bank and Dena Bank, sources said.

There has to be acceptance of both Vijaya Bank and Dena Bank officials within the ranks of Bank of Baroda that they are all now part of the same organisation, and the officers of the smaller banks should not be treated as second-grade citizens. Things may be fine at the top, one can’t say the same at the ground level functioning. What happened in the merger of PNB and New Bank of India is now happening in the case of Bank of Baroda, a banking industry observer said.

In the case of SBI, the HR integration problem is severe with many in State Bank considering the employees of their erstwhile subsidiary banks as second-grade citizens.

Banking industry observers reckon the HR integration challenge will last at least for five years, even though the employees involved are only from the public sector.

Published on October 08, 2019

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