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Saturday, Jun 13, 2009
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Business Daily from THE HINDU group of publications Saturday, Jun 13, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Public Sector Banks Money & Banking - Trade & Labour Unions Web Extras - Mergers & Acquisitions
Our Bureau New Delhi, June 12 About 50,000 employees and officers of the six associate banks of the State Bank of India are to go on a “protest strike” on July 3. The strike call has been given by the All-India Bank Employees’ Association (AIBEA) and the All-India Bank Officers’ Association (AIBOA) to protest against the SBI management’s plans to expedite the merger of the associate banks with the SBI. “We have given the strike call in the subsidiary banks of SBI to protest against consolidation attempts or proposals of SBI. The Indian banking industry does not need consolidation of banks. Rather what is required today is expansion of public sector banks,” Mr C. H. Venkatachalam, AIBEA General Secretary, told Business Line. He said the SBI Chairman, Mr O. P. Bhatt, had recently stated that steps were being taken to merge the six subsidiary banks with the SBI and that the process may be completed within three to six months. Improve accessThe strike call comes on the heels of the Finance Minister, Mr Pranab Mukherjee’s recent remarks that consolidation was necessary to improve the competitiveness of Indian banks globally and also to reduce the risk to financial stability. Stating that more than 50 per cent of people do not have access to banking services, leave alone bank credit, the AIBEA is of the view that consolidation and focus on global competition would distract the Indian public sector banks and lead them away from the needs of the aam admi (common man). According to AIBEA, mere merger of banks would not make them financially stronger. The public sector banks were not created for global competition, it said. The fallacy of big is strong has already been exposed with the overnight collapse of financial giants such as Lehman Brothers in the US, bank union leaders said. The six associate banks of SBI are State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore (listed), State Bank of Indore, State Bank of Patiala and State Bank of Travancore (listed). The topic of consolidation of banks in India is not a new one. A number of Government and RBI appointed committees had delved into this matter in great detail. The latest committee that analysed this issue and came with suggestions was the Government-RBI committee on financial sector assessment (CFSA). The CFSA had in its report noted that notwithstanding the advantages, the scope for consolidation in public sector banks needs to be explored with caution. The gains from consolidation and the synergies needed should be clearly quantified by the management and that it was important for bank boards to track whether these gains are in fact being realised. The panel felt that consolidation would prove useful only if certain enabling conditions such as progress in terms of industrial relations and human resources issues are addressed. The CFSA had also said that consolidation needs to be primarily market-driven. Bhatt explains why associate banks should pay royalty to SBI SBI subsidiary banks Bill introduced in LS SBI officers’ union defers strike Officers of SBI associate banks to go on strike More Stories on : Public Sector Banks | Trade & Labour Unions | Mergers & Acquisitions | State Bank of India
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