Money & Banking

Merger of associate banks with SBI may not be seamless for customers

G Naga Sridhar Hyderabad | Updated on January 15, 2018

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Online portals of associates and products offered by them will not be available from April 1

If you are a customer of any one of the five associate banks of State Bank of India (SBI), brace up for merger impact from April 1.

The impact, though not expected to cause any major disruption of banking services, will not be entirely seamless.

According to government orders issued on February 22 under the State Bank of India Act, 1955, the entire undertaking of State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala, and State Bank of Hyderabad will stand transferred to and vested in State Bank of India from April 1.

The biggest change will be in online transactions. Going by the SMS alerts being sent to customers of associate banks by the SBI merger team, the online portal of the five associate banks will cease to function from the date of merger.

They will have to login with the same user name and password to OnlineSBI for accessing their online accounts.

The NEFT/RTGS charges, however, will vary. While some associate banks charge less, all will have to pay charges applicable to SBI.

“For the time being, IFSC codes of associate banks will be the same but are likely to change from July 2017 onwards,” bank said.

At the product level, there will be continuity. For example, State Bank of Hyderabad offers more interest on certain deposits. This will continue till the expiry of the contract/deposit period.

But all other products of associate banks will cease to be offered and will be replaced by the SBI product basket.

According to a senior SBI official, processing of new loans from associate banks has already been stopped.

“This will surely cause some inconvenience to customers but we will speed up processing after April 15 to make it up,” he added.

The changeover will be a little tough for corporates as they will have to follow some new norms.

If they are using any of the associate bank’s facilities for tax payment or remittances online, they will have to select options under ‘erstwhile’ associate bank of their own to get redirected to the payment page.

Staff matters

For associate banks’ employees too, it will be a difference experience.

“It is just like leaving our home and entering into an ocean. We will surely miss our own brand. We will lose independence in operations which we enjoy now,” said the chief manager of an SBH branch here.

It would be relocation for them as some of the branches are expected to be given a makeover depending on the business requirements of SBI. A reshuffle of staff is also expected down the line in some branches as part of rationalisation.

Published on March 28, 2017

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