Stage set for SBI - Associate Banks Merger

As the stage gets set for the merger of SBI with its associate banks, State Bank of India (SBI) has begun preparing the incoming customers while taking time to address concerns of officers of the banks to be merged. Apart from a clarification on branch rationalization, interest rates and cheque books, work is under way at various levels to ensure a smooth transition, sources in the banking industry said.

Borrowers to Profit:

On customers loans, it said that there shall be no change in the effective rate of interest till renewal or reset, after which loans shall be priced according to SBI’s policies. For associate bank employees who had obtained loans, the existing rate shall continue till the loan is liquidated. After merger, the loans shall be at a rate applicable to the SBI employees, which is relatively less now.

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

Meanwhile, SBI share price was trading 1.10 per cent higher at Rs.252.40 on the NSE today.

Fear of Discrimination:

While the advisory is likely to get some clarity for customers, the same doesn’t seem to be the case for associate bank officers as yet. A senior leader of associate banks officers’ body said that the foremost was fear of discrimination against them.

Though a couple of meetings were held with associate banks officers’ body, those didn’t yield the desired clarity, something the officers insist on before the merger. In support, he alleged how officers of State Bank of Saurashtra and State Bank of Indore weren’t treated on a par with their SBI counterparts in spite of having the same seniority. The 2 banks were merged with the SBI in the last 8 years. In the current round, State Bank of Mysore, State Bank of Bikaner & Jaipur, State Bank of Patiala, State Bank of Travancore, besides SBH are to be merged with the SBI. Apart from their seniority being maintained, the associate banks officers also want allowances similar to what the SBI officers are drawing. However, the staff union of SBH is opposed to the merger itself.

Merger of SBH with the SBI would be a perfect case, the senior official stated. SBI has 700 in Andhra Pradesh and 400 branches in Telangana, while SBH has 400 and 750 respectively, he added. Post the merger, a new Circle for Telangana might be set up and some branches turned into specialized units like those for MSMEs and personal banking. Visit SBI share price history for further details.