SBI to stay trim post-merger to cut costs
27 March 2017
NPA-laden State Bank of India (SBI), which is expanding with five associate banks merging into it on 1 April, expects to shut down almost half the offices of these associate banks, including the head offices of three of them, and trim workforce over time to save on costs.
While the merger of six entities will add approximately 70,000 employees to SBI's current workforce, the bank plans to reduce the number over the next two years post-merger, mainly due to attrition, reduced hiring and digitisation, reports quoting SBI top sources said.
Reports quoting SBI managing director Dinesh Kumar Khara said that of the five head offices of these associate banks, SBI will dismantle three, along with 27 zonal offices, 81 regional offices and 11 network offices.
An IANS report quoting the official said the dismantling process of the associate banks' key offices will start on 24 April.
The five associate banks that will merge with SBI are State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP) and State Bank of Hyderabad (SBH).
Alongside, the country's largest bank, which has around 207,000 employees will see the addition of about 70,000 employees, including those of the five associates and the Bhartiya Mahila Bank, taking the total workforce of the comibned entity to 2,77,000.
SBI plans to bring this down to 2,60,000 by March 2019, a reduction of under 10 per cent.
However, SBI is not looking at lay-offs and actual reduction in headcount will come with re-assignment of the roles.
SBI will also reduce the annual hiring to a normal 5,000-6,000 against the record 19,000 it hired in 2016-17.
It would also optimise policy of branch expansion. New branches will be opened on the basis of business potential.
SBI expects the merger to bring benefits both in terms of branch network and business expansion.
SBI is India's largest bank with assets of Rs30,72,000 crore and ranks 64 globally in terms of size and assets (as of December 2015). Post-merger, it will be among the top 50 banks in the world.