Merger of State Bank of Travancore and SBI faces opposition in Kerala
Published: Aug 25, 2016
By TIOLCORP News Service
NEW DELHI, AUG 25, 2016: THE merger of State Bank of India and its five associates was going on seamlessly, until State Bank of Travancore (SBT), one of the five associate banks of State Bank of India which is merging with the parent, has shunted out a senior official for reportedly questioning the fairness of the merger scheme. SBT chief general manager, S Adikesavan, who was the negotiator, was transferred to SBI's Hyderabad office by the management, leading to protests by SBT employees and Kerala Chief Minister Pinarayi Vijayan shooting off a letter to Prime Minister seeking his intervention.
SBT was virtually bulldozed into the merger plan without following the due process. The Chief Managed claimed that the merger procedure was done without following the due formalities. There was no discussion or negotiation between SBT and SBI for the merger. He further alleged that all the decisions were taken by the SBI and the proposal was just put across.
As per one SBI source, the boards of all associate banks, including SBT which is listed on the stock exchanges, were held in Mumbai on August 18. The merger proposal was just handed over to them without any discussion on the terms and conditions like swap ratio, bank sources claimed. The merger is likely to lead to the closure of 200 branches of SBT.
As per the State Bank of Travancore Employees Union general secretary KS Krishna, the SBI management was stage managing all the decisions on their own and asked SBT officials to put their signature. They have not taken into account the sentiments of people, customers and the Kerala government.
The Kerala Legislative Assembly had recently passed a resolution against the merger of SBT with SBI, stating it would adversely affect the state's economic growth. The resolution, introduced by the Chief Minister, sought rescinding of the decision to amalgamate SBT with SBI by the Centre and the Reserve Bank of India.
On August 18, the central board of State Bank of India had approved the schemes of acquisition of the State Bank of Bikaner & Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Patiala (SBP), State Bank of Hyderabad (SBH) and Bharatiya Mahila Bank Limited (BMBL).
Merger of SBI and its five associates is a decision based on economic factors but it seems that the process has acquired political colours now.
