SBI seeks Centre’s nod to absorb associate banks
The country’s largest lender, State Bank of India, said it is seeking the Centre’s nod to merge its five associate banks and the newly created Bharatiya Mahila Bank with itself. This follows the boards of the associate banks — State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore — approving resolutions to pave the way for their acquisition by SBI.
In a filing with stock exchanges, State Bank of India said: “SBI is seeking ‘in principle sanction’ of the Central Government to enter into negotiation with the subsidiary banks and Bharatiya Mahila Bank Limited to acquire their businesses including assets and liabilities. While the decision is purely exploratory at this stage and there is no certainty in relation to our completing the acquisitions…”
It added that no decision had been taken approving any of the acquisitions and that the same would be taken by the Bank’s Board after evaluation. The move, has, however, not gone down well with employees of the SBI arms, and they have decided to go on strike on May 20.
Opposing the resolutions passed by the associate banks in Mumbai on Tuesday, the All India Bank Employees Association (AIBEA) said the decision was “not in consonance” with what Finance Minister Arun Jaitley had suggested when he had met them on March 23 and April 25.
In a statement, AIBEA Secretary-General CH Venkatachalam said that Jaitley had then opined that all the five banks can be merged into one single entity.
“But, what SBI and the associate banks are trying to do is the opposite to what the Finance Minister had suggested,” Venkatachalam said. The AIBEA statement said that without any intimation, suddenly an agenda was brought at the board meetings of these five associate banks on Tuesday to “close down the associate banks and for acquisition by the SBI.”
Despite opposition and protest by all the AIBEA workman directors and few independent directors, the resolution was adopted, the statement added.
“It is shameful that when the Government is talking of corporate governance and good governance, board agenda is brought without intimation on such a serious matter and a decision is taken,” the AIBEA statement said.
To protest this “provocative” action of SBI and associates, the AIBEA has asked its members to hold demonstrations on Tuesday and Wednesday outside the branches of the associate banks.
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