Stage set for merger of SBI, associate banks

Stage set for merger of SBI, associate banks

As the stage gets set for the merger of State Bank of Hyderabad as well as four other associate banks (AB), State Bank of India has began preparing the incoming customers while taking time to address the concerns of officers of the banks to be merged.

Apart from a clarification on branch rationalisation, interest rates and cheque books, work is under way at different levels to ensure a smooth transition, sources in the banking industry say.

Borrowers to gain

On customers loans, it said there will be no change in the effective rate of interest till renewal/reset, after which loans will be priced as per SBI’s policies. For AB employees who had obtained loans, the existing rate will continue till the loan is liquidated. After merger, the loans will be at a rate applicable to SBI employees, which, a senior official of SBH said, is relatively less now.

Necessary instructions, a SBI notice available on SBH website said, will be issued on validity of existing cheques for a specific period after merger. Those who had issued post-dated cheques would be advised to issue new cheque leaves of SBI.

Fear of discrimination

While the advisory is likely to fetch some clarity for customers, the same does not seem to be the case for AB officers as yet. A senior leader of AB officers body, who did not wish to be named, said foremost is fear of discrimination against them.

Though a couple of meetings were held with AB officers body, those did not yield the desired clarity, something the officers insist on prior to the merger. In support, he alleged how officers of State Bank of Indore and State Bank of Saurashtra were not treated on a par with their SBI counterparts despite having the same seniority. The two banks were merged with SBI in the last eight years. In the current round, State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala besides SBH are to be merged with SBI.

Apart from their seniority being maintained, the AB officers also want allowances similar to what SBI officers are drawing. The staff union of SBH, however, is opposed to the merger itself.

Merger of SBH with SBI would be a perfect case, the senior official said. SBI has 400 branches in Telangana and 700 in Andhra Pradesh, while SBH has 750 and 400 respectively, he said. Post merger, a new Circle for Telangana may be set up and some branches turned into specialised units such as those for MSME & personal banking.

Source:BankingUpdates