Money & Banking

`No induction of outsiders to perform core SBI functions'

Vinson Kurian THIRUVANANTHAPURAM | Updated on December 23, 2018

Kerala HC disposes of SBSU writ petition

The High Court of Kerala has disposed of a writ petition by the State Banks Staff Union (SBSU) after recording a submission that 'no personnel will be inducted for carrying out any essential function of State Bank of India (SBI).'

Justice Anu Sivaraman had heard the petition filed by SBSU, challenging the SBI management’s move to outsource core functions.

Earlier on December 3, the court had directed SBI to maintain status quo on its decision to outsource currency administration and cash management to third-party service providers in the Kerala Circle.


The SBSU had argued that the State Bank of India Act,1955, provides that cash management is one of the core functions of the bank.

Such a function cannot be permitted to be outsourced in terms of not just the bank's own policies but also those of the Reserve Bank of India (RBI).

The petitioners alleged that the bank is is attempting to outsource core functions of cash management to private agencies and allowing their employees to function within its premises.

Also on the outsourcing list are the currency administration cell; cash administration in branches and offices; and cash administration and management and administration of the currency chest.

They also argued that outsourcing of the currency administration cell violated the objective of State Bank of India Act 1955 and guidelines framed by the RBI.

The bank should not be allowed to induct manpower to manage banking functions in the branches, head office, and other offices other than through established recruitment rules.

Currency administration is being executed by permanent employees of the bank. Outsourcing its amounts to 'denial of future employment' and violated Article 16 of the Constitution', they said.

Meanwhile, in its counter affidavit, the SBI stated that the fully automatic note verification and processing machine is intended to segregate notes into ATM fit notes, reusable notes, soiled and unusable notes, and fake notes.


The machine is being installed in 89 identified centres of the bank and that the out of 89, the machines have been successfully installed in 77 centres, including three centres in Kerala.

In the remaining centres also, what is being done is only the installation of the machines for sorting the cash.

There is no threat of any kind to the scope of employment or promotional opportunities of SBI employees from the mechanical sorting and bundling of notes.

Neither the interest of the employees nor that of the customers is in any way compromised through implementation of the mechanical segregation and bundling of notes.

On the contrary, the bank will be able to utilise the manpower for enhancing its business potentials in a far superior way.

There is no intention to give direct control of currency chests to any third party; what is being outsourced is only the currency management using the automatic currency sorting machines.

Provisions of settlements entered into between the bank and the SBSU as well as regulatory guidelines issued by the RBI will be scrupulously followed in the matter.

M Sasindran and S Shyam Kumar represented the petitioners while George Thomas Mevada (Senior) and KR Rajkumar did the honours for the respondents.

Published on December 23, 2018

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