State Bank Merger

State Bank of India has been going at a brisk pace to merge its associate banks and Bharatiya Mahila Bank in itself. In spite of the strikes by the State Bank Associate employees against the merger, the Arundhati Bhattacharya,SBI Chief said that the merger would be completed by the end of the financial year.

“People have to understand that the change is inevitable. There has been a strike at many occasions, but we have to educate them and take them on board” she mentioned on the sidelines on the launch of SBI exclusive, an SBI wealth management offering.

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The Five associate banks that are proposed for the merger are State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad. The merger of associate banks started with, State Bank of Saurashtra and followed by State Bank of Indore.

There have been protests in all the 80,000 state bank associate branches on Friday 29th July 2016, against the merger affecting the financial services across the country. The strike was carried out under the All India Bank Employees’ Association (AIBEA) banner. Adding to the strike issue, was the announcement of the merger by the end of March, which made the employees much upset.

Concerns of the State Bank Associate Employees:
• The concerns of the state bank associates are that a forced merger is happening which should not be the current priority.
• The digitalization initiatives taken up by the private sector banks have hit the PSB’S strongly.
• The state bank of India being the largest player in the market with 16500 branches in India and 191 branches overseas has taken the initiatives like mobile wallet, digital banks, etc. to fight the competition, but the associates need time to pick up.
• The merger can be no answer to these issues, in fact, brings new challenges regarding people, technology and branch integration.
• Moreover, the All India Bank Employees’ Association (AIBEA) want associate state banks to emerge as a single largest bank instead of the parent SBI.

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The merger is expected to make state bank one of the largest lenders in Asia with an asset base of 37 lakh crore.As per the states interests, the merger will make the State Bank combined group to a position at 45th rank globally regarding assets. Currently, the position of SBI is 52. The cost to income ratio will come down to 100 points post-merger. The merger will be an advantage to the current economic position of the country, and many such mergers are expected to come, according to the financial analysts.