Money & Banking

Merger will not place SBI among the global top 50 banks: AIBOF

L N Revathy Coimbatore | Updated on January 20, 2018

“Merger of the SBI associate banks with the parent will not take the country’s largest lender among the top 50 global banks,” said D Thomas Franco Rajendra Dev, President, All India State Bank Officers’ Federation.

His argument is based on a remark made by the Chair person of State Bank of India Arundhati Bhattacharya (in August last), where in she had stated that even if the five associate banks of SBI were merged with SBI, the latter’s balance sheet would not go up, the group balance sheet would remain the same. “And therefore the valuation I get will remain the same. Only thing that will happen is, I can bring about greater efficiency. But I can do that even without merging,” she had stated in that interview then.

“Less than a year ago, the SBI Chair person has made this statement. So it would be wrong to suggest that the combined entity would place the bank among the top 50 in global ranking, size wise,” Franco said.

He further did not rule out closure of branches post the merger. “For instance, in Kerala, a good number of State Bank of Travancore (SBT) branches are located right opposite or next to State Bank of India (SBI) branches. Closure of branches located in close proximity will become inevitable, putting the staff in a precarious situation as many will be rendered ‘surplus’,” the AIBOF President said, voicing concern about the staff’s predicament in such pockets.

Having said that, Franco did not fail to add that such a merger would lead to loss for SBI as the associate bank employees foresee that the merger would entitle them to get pension on par with SBI.

Published on May 18, 2016

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