Mumbai: The finance ministry has approved the merger of the State Bank of Saurashtra with its parent State Bank of India even as employees of public sector banks have called a one-day strike to protest the move.
''The ministry of finance has passed an order for acquiring of State Bank of Saurashtra (SBS) by State Bank of India,'' SBI said in its regulatory filing, adding, the merger would be effective from the date ''as may be notified by the Government of India in the official Gazette.''
Three bank unions - All India Bank Officers Association (AIBOA), All India Bank Employees Association (AIBEA) and the Bank Employees Federation of India (BEFI) - will join the strike. The other six bank unions said they are adopting a wait-and-watch approach.
Bank employees who oppose the merger say the move is part of a larger plan for privatisation of state-run banks.
The strike is expected to affect operations at 60,000 bank branches as seven lakh other employees are expected to join the strike, according to K Bhaskaran, vice-president of AIBOA.
SBS is a wholly-owned subsidiary of the State Bank of India and the boards of both the banks had approved the merger in August last year. The union cabinet also cleared the merger proposal earlier this month.
However, the government is expected to present the SBI Subsidiary Bank Amendment Bill, 2008, in Parliament during the monsoon session for final approval of the merger.
The finance ministry has set the stage for repealing the State Bank of Saurashtra Act, 1950 and amending the SBI Subsidiary Act, 1959 to effect the merger.
The amended SBI Subsidiary Act would have no references to the SBS Act, 1959.
The SBI-SBS merger is expected to lead to further consolidation among PSU banks, especially among the State Bank Group. SBI has six other associate banks and a merger of the group would form a formidable banking network with a presence in every nook and corner of the country.