SBI associate bank employees strike work over merger move

Employees of State Bank of India's associate banks, including State Bank of Mysore, State Bank of Patiala, State Bank of Travancore and State Bank of Hyderabad, went on a one-day strike on Thursday to protest the move to merge them with the SBI permanently.

The striking employees demanded filling up of vacancies, increasing the staff strength in the housing loan section and extending the compassionate ground appointments to associate banks also.

The employees resorted to strike after talks in Delhi over these issues recently failed.

The All India Bank Employees Association, which spearheaded the strike claimed that 50,000 employees participated in the strike.

They also warned of a nationwide strike on 24 June if the SBI management did not take a decision on their demand.

Employees and trade unions have long been opposing the merger of State Bank of India (SBI) with its associate banks, which they fear, would result in loss of identity to individual banks and possible job cuts in areas where functions overlap.

The unions have now gone one step further demanding total de-linking of the remaining five associates from SBI and making them financially independent.

SBI has five remaining associates - State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Mysore, State Bank of Hyderabad and State Bank of Patiala - of which the first three are listed.

SBI has been pushing for a merger of its associates with itself in order to increase its size and be counted among global banks. It has already merged two of its subsidiaries with itself - State Bank of Saurashtra in August 2008 and State Bank of Indore in June 2009.

The bank's ambition to become even bigger indeed deserves merit since Indian banks, in general, are pygmies when compared with Chinese or European peers.

Even SBI, with all its might in the domestic market, does not figure among the top lenders of the world.

To be able to fund big corporations or big projects, the country still needs pooling of resources by several banks.

The Reserve Bank of India (RBI) too has highlighted this in the past saying India needs three -  four big sized banks to cater to a growing economy.

However, opponents of the merger argue that when it comes to SBI, the merger of associates does not make a major difference in the size and scale of the combined entity.

SBI and its associates together had total assets of Rs26,06,658 crore as of March 2015 while the five associates together held only a fifth (Rs5,58,578 crore) of the total asset size of the State bank group.

Also, the associates account for 23 per cent of total group deposits, 22 per cent of the combined advances and 28 per cent of the branches.

According to the unions, it makes better sense to delink the associates from the parent and begin the process of divestments in subsidiaries and let go of the majority control in its smaller associates.

This will help SBI focus on improving its efficiency and achieve sound growth on its own, rather than seeking the inorganic path.