Mumbai: Boards of the five associate banks of the State Bank of India (SBI) group met individually in Mumbai on Tuesday and discussed the possibility of a merger with the parent bank, said representatives of workers’ unions who are aware of the proceedings. Taking note of the development, the All India Bank Employees Association (AIBEA) has called for an all India strike on 20 May to oppose the intended consolidation.
According to a statement issued by AIBEA, at the board meetings of the five associate banks, one of the agenda items introduced was to consider a merger with SBI.
“..to enter into negotiation with SBI for acquisition of business including assets and liabilities,” read the agenda item.
“Despite opposition and protest by all the AIBEA’s workman directors and few other independent directors, about the proposal and the procedure adopted, the resolution has been approved in this regard,” said AIBEA in its press release. A second representative of the workers’ union confirmed that the agenda item had been introduced and approved.
As of 3.50pm, none of the associate banks had informed the stock exchanges about the board meeting nor had any resolution to consider a merger with the parent bank been passed.
Arundhati Bhattacharya, chairperson of SBI, did not respond to a call and a text message.
In an interview to Business Standard on Monday, finance minister Arun Jaitley hinted that the government was looking at bank consolidation with some urgency. When asked what the government’s timeline on bank consolidation was, Jaitley said to “wait for a few days”.
The five associate banks have a cumulative advances base of Rs.3.78 trillion and a deposit base of Rs.5.03 trillion, according to the last reported numbers. SBI, the parent bank, had advances of Rs.13.91 trillion and deposits of Rs.16.71 trillion as of the end of the December quarter.
“To express our resentment and protest to this provocative action of the SBI and Associate Banks, we call upon all our members to hold demonstrations today and tomorrow before branches of Associate Banks. We also call upon all our members in the 5 Associate Banks to observe protest strike on 20th May, 2016,” said AIBEA.